Sumary of Explainer-Main Battles Ahead for U.S. Democrats’ $3.5 Trillion Social Spending Bill:
- The House Ways and Means Committee on Wednesday was poised to advance a tax plan on Wednesday that would raise the top tax rates to 39.6% for individuals and 26.5% for corporations and hike capital gains taxes, rolling back part of Republicans’ 2017 tax cuts.
- In committee debate, Republicans hammered these credits as giveaways to wealthy Tesla car buyers and corporations like Amazon.
- Democrats’ plans to extend a larger Child Tax Credit through 2025, providing families monthly payments of up to $300 per child, would cost a hefty $556 billion, according to JCT.
- Tax credits for child care workers and expenses would cost $35 billion and an expanded Earned Income Tax Credit for low-income workers would cost $135 billion over a decade.
- Manchin has voiced concern that the Child Tax Credit contains no work requirements for parents nor education requirements.
- A Reuters analysis has found that the expanded credit has disproportionately benefited Republican states.
- STATE, LOCAL TAXES Republicans under former President Donald Trump’s 2017 tax law capped state and local tax deductions (SALT), at $10,000, effectively raising many tax bills in higher-tax Democratic states such as New York and California.