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Tax Bill Passes House; Senate Outlook Cloudy

February 5, 2024

The House of Representatives passed H.R. 7024, the Tax Relief for American Families and Workers Act of 2024, on Jan. 31, by a vote of 357 to 70.

• 169 Republicans and 188 Democrats voted in favor of the legislation; 47 Republicans and 23 Democrats voted against the legislation.
• CREFC and 21 other real estate trade groups sent a letter to Congress supporting the legislation.

Why it matters: As previously noted, the bill includes a wide range of policy areas with major provisions reimplementing the child tax credit, boosting Low-Income Housing Tax Credit (LIHTC) funding, and reinstating R&D expensing.

What’s next: The bill now heads to the Senate where it faces an uncertain future.

• Overall support in the Senate is unclear, but informal counts put the bill nine votes shy of the 60 vote filibuster threshold.
• Some GOP senators are calling for hearings on the bill, while others want the ability to offer amendments to the bill during floor votes. Any changes would require the House to re-pass the legislation.
• Majority Leader Chuck Schumer (D-NY) could consider the bill as a standalone measure, which would take up valuable floor time. Alternatively, the measure could be paired with a government spending vehicle to move more quickly.

The big picture: This legislation sailed quickly through the House by a large margin despite fierce opposition from the left and right flanks of each party.

Democrats and Republicans can claim they got something out of the deal without it being an outright win for either one. Rep. Danny Davis (D-IL) stated:

"You know, I've been told that a half a loaf is better than none. This isn't even half a loaf, but I'm going to vote for it because our families and businesses need help.”

• Democrats: The child tax credit was the focus of Democrats who originally wanted to reinstate the higher child tax credit from 2021, but they settled for a lower number. Enhancing Low-Income Housing Tax Credit provisions to encourage more affordable housing was also a major priority.
• Republicans: Business taxes were the focus for Republicans, as the bill restores full R&D expensing, interest deductibility, and 100 percent expensing.

Last week, the House passed a $78 billion tax package in a broadly bipartisan vote. 

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