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Editorial

Editorial: Bipartisan tax measure is leadership in action

The Editorial Board
Friday, January 26, 2024

Effective leaders get things done, and Southeast Missouri's Jason Smith is getting things done as chairman of the U.S. House Ways and Means Committee.

Smith, who has represented the region in Congress for more than a decade, wields the gavel for the tax-writing committee, and he, along with his Democratic counterpart in the U.S. Senate, Sen. Ron Wyden of Oregon, hammered out a bipartisan tax measure that will help businesses and families without adding to the federal deficit.

The bill provides several tax cuts -- allowing companies to deduct the purchase of equipment, technology and research and development costs immediately, rather than over a period of five years and building in more tax burden flexibility related to borrowing costs.

Smith said the measure "strengthens Main Street businesses, boosts our competitiveness with China and creates jobs."

Those measures are smack in the middle of the Republican wheelhouse and have wide-ranging GOP support. But Republicans only control the House; Democrats have a majority in the Senate.

Enter Smith's leadership.

Recognizing that for the tax cuts to become law he must compromise with Senate Democrats, Smith worked with Wyden to expand a federal child tax credit. The Smith-Wyden bill will allow lower-income families to deduct up to $400 more per child from their federal tax bill (phased in over the next couple years). The Center on Budget and Policy Priorities, a liberal think tank, estimated that 16 million children -- including many in Southeast Missouri -- will benefit from the measure. The bill also provides some assistance for low-income housing.

Senate Majority Leader Chuck Schumer, D-N.Y., said he supported the tax package and "that there are many things in it both sides can celebrate." He praised the inclusion of an increased tax credit for the construction and rehabilitation of housing for low-income households, and he said he could not have supported the package without it.

"The low-income housing tax credit is one of the most effective tools in existence to increase the supply of affordable housing," Schumer said. "This package will make this credit far more generous and far more easy to access."

To ensure the measure doesn't add to the federal debt, the legislation will end a COVID-related tax break early. Under current law, businesses had until April 15 of next year to claim an employee retention tax credit. The bill would bar additional claims after Jan. 31 of this year. It also would increase penalties for tax preparers failing to undertake due diligence in submitting those COVID-19-related claims.

Businesses get some tax relief. Struggling families get some help. The nation's debt doesn't increase.

This legislation is a good example of our elected leaders working together to help their constituents.

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