COULD DIVIDED CONGRESS PASS BIDEN TAX IDEA
January 14, 2021 - Douglas Myser
Could divided congress pass biden tax idea. The conventional wisdom is that President elect Joe Biden's ambitious tax agenda will die in the Senate, assuming the chamber remains under GOP control following two January 5th runoff elections in Georgia. But don't be surprised if Congress approves at least some of Biden's tax plan, even if the GOP (barely) controls the Senate. Biden certainly won't get all of his proposed $2.1 trillion tax increase over the next 10 years. But Congress could pass a revenue neutral bill that pairs a tax cut aimed at low and moderate income households with modest tax increases on corporations and high income individuals. Long shot ? Perhaps. Impossible ? No. Biden's plan really combines two very different initiatives. It would cut taxes for low and moderate income households by about $1 trillion, mostly by creating or expanding tax credits, and it would raise taxes on corporations and high income households by roughly $3.1 trillion. Dig into biden's plan a bit more deeply and you'll find several proposals that enjoy bipartisan support and could find their way into a tax bill in 2021 or more likely 2022. Could divided congress pass biden tax idea.
Some areas of potential compromise: Expanding tax credits for families with children. Biden has proposed two initiatives--a temporary bump in the child tax credit and an expansion of the child and dependent care tax credit. Before joining Biden's ticket, Vice-presidential elect Kamala Harris proposed a plan to supplement the earned income tax credit and expand subsidies for middle income families and low income "childless" workers. And the idea of expanding the child tax credit has GOP support as well. Senate Republicans including Marco Rubio (R. Fl.) and Mike Lee (R.UT) back the idea. And some Republicans may want to embrace tax cuts for middle income working households. Packaged carefully, some proposals to expand refundable credits for those families could win Senate support.