Dozens of U.S. House Democrats on Thursday sent a letter to the party’s congressional leaders, calling on them to push for the reinstatement of the expanded Child Tax Credit in a year-end compromise tax package—and to use Republicans’ demand for corporate tax breaks as a bargaining chip to secure much-needed aid for families across the country.
Republicans are calling for the reversal of a rule which requires companies to amortize domestic research and development expenses every five years, instead allowing them to deduct those expenses every year.
Combined with a reinstatement of loan interest deductions and a renewal of a “bonus depreciation” tax break, the Republicans’ proposal would amount to about $50 billion in corporate tax cuts in the must-pass bill.
Led by Congressional Progressive Caucus chair Rep. Pramila Jayapal (D-Wash.) and Rep. Jimmy Gomez (D-Calif.), 58 Democrats signed the letter addressed to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.), calling on them to also include billions of dollars in relief for families.
“We should not extend corporate tax breaks unless and until we deliver additional relief for families,” wrote the lawmakers. “Should a particular provision to delay or terminate the R&D amortization requirement be included in any must-pass or tax extender bill, it must be paired with provisions that will provide crucial support to families, specifically an extension of the expanded [Child Tax Credit] CTC and an expansion of the [Earned Income Tax Credit].”
The U.S. Census Bureau reported in September that the enhanced CTC, which was passed as part of coronavirus pandemic relief, slashed child poverty by 46% between 2020 and 2021. The families of 60 million children received a total of up to $3,600 per child, with payments of up to $300 per child being sent on a monthly basis in the second half of 2021.
The payments were credited with helping millions of families afford groceries, school expenses, and other necessities, and “almost immediately” reduced food insufficiency by 24% after the first payments were sent out in July 2021, the Democrats wrote in the letter.
Democrats pushed last year to include the expanded CTC in the Build Back Better Act, but were stymied by Republicans and right-wing Sen. Joe Manchin (D-W.Va.). When the credits expired in January 2022, an estimated 19 million children in the lowest-income households once again became ineligible for the full tax credit, according to the Center on Budget and Policy Priorities (CBPP).
Americans for Tax Fairness noted that Republicans are pushing for corporate tax breaks a year after “corporations raked in their highest profits and paid the least taxes since 1961.”