Lame-duck Congress eyes $100B tax-cut deal with break for business
After Democrats spent the last two years pushing, with some success, to raise business taxes, they could end up striking a deal with Republicans by year-end on a roughly $100 billion taxcut package.
Republicans — who are expected to control the House as of January — want tax breaks for private equity, manufacturers and businesses. For their part, Democrats want to expand the child tax credit, using their final weeks controlling both congressional chambers to reinstitute a policy they see as critical to reducing child poverty. In the wake of a bruising midterm election campaign, it’s unclear whether the two sides can secure a compromise. Failure would see interests harmed on both sides, an augur for an all the more tense alignment in Congress once the two chambers have divided control next year.
Practically, an agreement depends in part on Democrats scaling back their original goal of nearly doubling the current $2,000-perchild credit and paying it in monthly installments.
Democrats could secure a more modest child tax credit in return for extending the soon-to-expire business tax breaks that Republicans support — affecting research and development costs, investment deductions and debt write-offs. The resulting package would benefit a swath of stakeholders ranging from private equity firms and pharmaceutical companies to the parents of young children.