Manchin won’t support the current BBB. In case the delay into 2022 wasn’t enough of a problem for the White House, Sen. Joe Manchin went on Fox News yesterday to say he would not support the Build Back Better (BBB) Act as currently written: “I cannot vote to continue with this piece of legislation.” In a more detailed statement released after his TV appearance, Manchin’s office said he has issues with the legislation beyond the potential topline cost. It remains to be seen whether the entire effort is dead or another rewrite could address his concerns. The White House says that on Tuesday, Manchin presented Biden with his own $1.8 trillion alternative.
Democrats look to address a lapse in the enhanced child tax credit. With BBB on ice until the new year, the American Rescue Plan’s expanded child tax credit (CTC) will expire. The immediate problem: What happens to the monthly payments that end this month? White House Press Secretary Jen Psaki said the White House has talked to Treasury about doubling February’s CTC payments to offset any missed January checks. But that still would require Congress to authorize continued advanced payments.
More CTC expirations on the horizon. Even if the current version of BBB makes it into law, the increased credit amount ($3,000 for most children and $3,600 for those under age 6) would revert to $2,000 after 2022. That was the amount set in the 2017 Tax Cuts and Jobs Act. But after the TCJA version expires in 2026, the credit amount would fall to $1,000. TPC’s Elaine Maag spoke to CNBC about the challenges of making CTC changes temporary.
Let’s talk about the international provisions. Though the current version of BBB is in trouble, it still includes revised rules governing the taxation of US-based multinational corporations that both restrict profit shifting and raise new revenue. NYU Tax Law Center Senior Attorney Advisor Rose Jenkins will join The Prescription on Dec. 23 to discuss implementation challenges for Treasury and taxpayers.
Michigan SALT cap workaround redux. Earlier this year Democratic Gov. Gretchen Whitmer vetoed a proposed workaround to the state and local tax deduction cap for pass-through businesses. She was concerned about potential implementation costs. Now, the GOP legislature has passed the workaround with a veto-proof majority and implementation funding. More than a dozen states already have passed similar provisions.
Omicron has UK businesses requesting more government relief. A new surge in COVID-19 cases driven by the Omicron variant has businesses in the United Kingdom lobbying Chancellor of the Exchequer Rishi Sunak for additional government fiscal support. The UK already is seeing a reduction in restaurant bookings and London public transit use. Sunak says local governments should start releasing leftover aid from previous rounds of assistance.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Renu Zaretsky is on vacation until December 29. Until then, email John Buhl at [email protected].
