Today, Congressman Mike Garcia (CA-27) voted in support of H.R. 7024, the Tax Relief for American Families and Workers Act. This bipartisan, pro-growth legislation will help small businesses, promote American competitiveness, and support working families. The bill passed the House resoundingly on a bipartisan basis. 

“This is a significant bipartisan victory that will deliver tax relief for CA-27’s workers, families, and small businesses,” said Rep. Garcia. “For the last three years, American families nationwide have watched as prices rise to historic levels while their paychecks continue to shrink. Inflation isn’t a problem that will solve itself, and I’m proud to see Congress act where the White House failed.

“This legislation builds on the success of the 2017 Tax Cuts and Jobs Act (TCJA), which produced historic results: 50-year record unemployment, higher wages, and increased growth and investment for small businesses. But it notably does not extend the TCJA’s legislative middle-finger aimed at states like California: the $10,000 state and local tax (SALT) deduction cap. This perverse, arbitrary cap is set to expire at the end of 2025.

“In total, this tax package secures $600 billion in pro-growth, pro-small business, pro-worker tax incentives. This is an important opportunity to pass common-sense, fiscally conservative policies that will lead to more American innovation, jobs, and prosperity. I urge my colleagues in the Senate to join us in passing this bipartisan legislation, and I look forward to President Biden signing it into law.”

The Tax Relief for American Families and Workers Act…
Expands Innovation and Competitiveness with Pro-Growth Economic Policies

• Research & Development (R&D) expensing: allow businesses of all sizes to immediately deduct the cost of their U.S.-based R&D investments instead of over five years – encouraging American innovation and improving our competitive position versus China and the rest of the world.
• Interest deductibility: continued flexibility for businesses forced to borrow at higher interest rates to meet their payroll obligations and expand their operations.
• 100 percent expensing: restore full and immediate expensing for investments in machines, equipment, and vehicles.
• Taiwan double tax relief: strengthen America’s competitive position with China by removing the current double taxation that exists for businesses and workers with a footprint in both the United States and Taiwan.

Builds Up Main Street and Rebuilds Communities Struck by Disasters

• Expand small business expensing cap: increase the amount of investment that a small business can immediately write off to $1.29 million, an increase above the $1 million cap enacted in 2017.
• Cut red tape for small business: adjust the reporting threshold for businesses that use subcontract labor from $600 to $1,000 and index for inflation – the first update to the threshold since the 1950s.
• Help families get back on their feet: provide disaster tax relief covering recent hurricanes, flooding, wildfires, and the Ohio rail disaster.

Supports Working Families with an Enhanced Child Tax Credit

• Expand access to child tax credit: phased increase to the refundable portion of the child tax credit for 2023, 2024, and 2025.
• Eliminate penalty for larger families: ensure the child tax credit phase-in applies fairly to families with multiple children.
• One-year income lookback: flexibility for taxpayers to use either current- or prior-year income to calculate the child tax credit in 2024 or 2025, similar to bipartisan action taken six times in the past 15 years.
• Inflation relief: adjust the tax credit for inflation starting in 2024. 

Supports Communities with an Updated Low-Income Housing Tax Credit

• Increases supply of low-income housing: enhance the Low-Income Housing Tax Credit, a public-private partnership with a proven track record, with increased state allocations and a reduced tax-exempt bond financing requirement.

Eliminates Fraud and Waste by Ending the Employee Retention Tax Credit Program

• Saving over $75 billion in taxpayer dollars: accelerate the deadline for filing backdated claims to January 31, 2024, under the COVID-era employee retention tax credit – a program hit by major cost overruns and fraud.