Senate Republicans stopped a $78 billion package of tax cuts benefiting businesses and low-income families, two constituencies the party needs to win big in November.
Democrats, who will return home to campaign later this week, now plan to paint Republicans as the party that blocked a pro-family tax cut they estimate would benefit 16 million children and benefit struggling small businesses.
“This should be a no-brainer. Even House Republicans are for this,” Senate Majority Leader Chuck Schumer said.
Democrats couldn’t muster the 60 votes needed to overcome a filibuster blocking the Senate from consideration. The procedural step received 48 votes in favor and 44 against.
Only three Republicans voted in support: Josh Hawley of Missouri, Markwayne Mullin of Oklahoma and Rick Scott of Florida.
Several senators were absent, including Ohio Senator JD Vance, the Republican vice presidential candidate, who has previously said he favors an expanded child tax credit. Vance was on a campaign trip to Arizona.
The tax package, which passed the House on a 357 to 70 vote in January, would have provided a boon for US companies with large capital and domestic research expenditures and had been a top priority of business lobbyists.
Boeing Co., General Motors Co., Deere & Co., Caterpillar Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc. are among the companies that would have benefited, according to Bloomberg Intelligence.
North Dakota’s Kevin Cramer said Schumer made a “cynical ploy” to hold the vote rather than allow amendments. Texas Republican John Cornyn said the vote was “not an honest attempt to pass legislation.”
Schumer told reporters he’d consider allowing amendments, but not until after the monthlong break.
“They are going to feel a lot of pressure over August recess, and we hope they will come back and change their mind in September,” he said of Republicans.
Others, including top Republican tax-writer Mike Crapo, have said they want to wait until next year, when the 2017 Trump tax cuts expire and they hope Republicans will control the Senate and White House.
Other Republicans have signaled they don’t want to hand Democrats a victory so close to the election. The Internal Revenue Service had said it could send refund checks to families benefiting from the break within six weeks of the bill being enacted.
The bill allows more of the $2,000 per child tax credit to be paid to individuals with such low income they currently only qualify for part of the credit. It would also bolster payments to low-income filers with more than one child. The maximum credit for all parents would be indexed to inflation for two years starting in 2024.
Some conservatives argued that a provision allowing parents to claim credits based on a prior year’s earnings would discourage work. Senate Finance Committee Chair Ron Wyden, the bill’s Democratic author, said he offered to remove that provision but that prompted more demands from Republicans.
A coalition of 250 business groups including the US Chamber of Commerce, Business Roundtable and National Association of Manufacturers lobbied hard for passage this year.
Wyden said the GOP move bodes ill for a grand bargain on the Trump tax cuts next year, saying such deals don’t just happen by “osmosis” and will require the kind of bipartisan dealmaking the Senate Republicans rejected.
Taxing Subjects (https://www.drakesoftware.com/blog): The Republican party can shape legislative priorities for the next two years, setting the stage for long-term policy changes. A downloadable resource offers a breakdown of key policy areas and action steps for tax pros and small businesses.
AICPA & CIMA Insights (https://www.aicpa-cima.com/blog): How the IRS and tax pros can both start prepping for any government shutdown.
Eide Bailly (https://www.eidebailly.com/taxblog): “Just in time for the holidays,” a federal appeals court has restored the Corporate Transparency Act requirement for businesses to disclose their beneficial owners.
Taxable Talk (http://www.taxabletalk.com/): And just like that, yet again, with an injunction’s stay, course is reversed.
The Tax Times (https://www.thetaxtimes.com): The IRS continues to claw back from non-filers, to the tune of 10 figures and counting.
The National Association of Tax Professionals (https://blog.natptax.com/): Favorite headline of the week: “The best gifts for the tax pro in your life this holiday season.”
National Taxpayer Advocate (https://www.taxpayeradvocate.irs.gov/taxnews-information/blogs-nta/): “‘Twas the night before tax season, and all through the land; Tax professionals were working, each with pen in hand; The forms were all sorted with numbers just right; who says tax accounting can’t thrill and excite?”
H&R Block has given the world just what it wants to see this holiday season: Santa Claus’s tax return.
Santa has a lot of itemizations to consider. Eight tiny reindeer depend on him for food and shelter, for instance, but are they dependents? How much can you give to one person before reporting it? Does Santa keep good mileage records for his 41.5 million miles? Santa isn’t an employee, so compensation (even in cookie form) over the threshold may create a 1099-NEC.
Old St. Nick, who files MFJ with Mrs. Claus, did all right on 1040 Line 34, but some of his numbers do bear examination: 6.3 million cookies and 2 million gallons of milk means a third of a gallon of milk per cookie. Will the deduction of coal, magic dust and sleighbells stand up to audit? At least Santa has plenty of time on his hands between January and April to find a good preparer.
“Even the jolly man in red takes time to report taxes,” reads the announcement from the tax prep giant. “He’s probably the world’s most famous small-business owner, running a gift-giving workshop and distribution network across the globe … Santa is giving us the first ever peek at his tax return and showing us how he used H&R Block Online and AI Tax Assist to get his maximum refund.”
The SECURE 2.0 Act contained several changes to traditional and Roth individual retirement accounts and 401(k) plans that are being phased in over the coming years, with several notable changes coming in 2025. The Illinois CPA Society highlighted five changes coming to IRAs and 401(k)s in 2025: