While most of America is shopping for the holidays, or anticipating the different family issues that may arise, there is a very different issue occurring on Capitol Hill. The GOP is currently trying to quietly pass a bill to make certain tax cuts permanent. The cuts would include tax cuts currently put in place for large corporations, whose lobbying efforts have dramatically increased over 2014. Other provisions to be made permanent include a measure allowing small businesses to deduct virtually any investment, the deduction for state and local sales taxes, the American Opportunity Tax Credit for college costs, deductions for employer-provided mass transit, and four different breaks for corporate and charitable giving.
President Obama has vowed to veto this bill. Why? Because the GOP led congress has purposely left out the two tax cuts that many liberal Democrats hold dear: a permanently expanded earned-income credit, and a child tax credit for the working poor. Earned-income credit is a benefit for working people who have low to moderate income. With varying circumstances depending on the number of children one has, one can qualify if they earn up to $50,270 under the maximum plan.
“The president would veto the proposed deal because it would provide permanent tax breaks to help well-connected corporations while neglecting working families,” said Jennifer Friedman, a White House spokeswoman.
Republican negotiators have said that they have “exclude[d] those measures as payback for the President’s executive order on immigration,” saying that “a surge of newly legalized workers” would claim the credit.
Excluding the people included under President Obama’s immigration bill, over fifty million American citizens live in poverty and would qualify for the tax credits, which are threatened to be scrapped.
Proponents of the deal said that the plan would make tax breaks permanent that have been passed in short term increments. Doing so would give businesses more certainty about making investments, they said. Advocates are certain that this could boost overall economic growth. It would also extend tax benefits that have already shown to have broad bipartisan support.
“Failure to extend these provisions is a tax increase,” more than 500 business groups wrote to lawmakers Nov. 18. “It will inject instability and uncertainty into the economy and weaken confidence in the employment marketplace.”
Yet, many Democrats have rejected this notion by furiously pointing out that the GOP tax breaks would also include things such as cuts for racehorse owners, but would phase out wind energy tax breaks.
However, the biggest loser in this could end up being the treasury, which is expected to lose over $440 billion in revenue due to these tax cut extensions further aggravating the burden of the deficit.
No matter what ends up happening, what is undeniable is ultimately the fact that millions of American families, as well as thousands of corporations, will be affected by the final decision.