[Congressional Record Volume 170, Number 18 (Wednesday, January 31, 2024)]
[House]
[Pages H343-H358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAX RELIEF FOR AMERICAN FAMILIES AND WORKERS ACT OF 2024
Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 7024) to make improvements to the child tax credit,
to provide tax incentives to promote economic growth, to provide
special rules for the taxation of certain residents of Taiwan with
income from sources within the United States, to provide tax relief
with respect to certain Federal disasters, to make improvements to the
low-income housing tax credit, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7024
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; ETC.
(a) Short Title.--This Act may be cited as the ``Tax Relief
for American Families and Workers Act of 2024''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents; etc.
TITLE I--TAX RELIEF FOR WORKING FAMILIES
Sec. 101. Per-child calculation of refundable portion of child tax
credit.
Sec. 102. Increase in refundable portion.
Sec. 103. Inflation of credit amount.
Sec. 104. Rule for determination of earned income.
Sec. 105. Special rule for certain early-filed 2023 returns.
TITLE II--AMERICAN INNOVATION AND GROWTH
Sec. 201. Deduction for domestic research and experimental
expenditures.
Sec. 202. Extension of allowance for depreciation, amortization, or
depletion in determining the limitation on business
interest.
Sec. 203. Extension of 100 percent bonus depreciation.
Sec. 204. Increase in limitations on expensing of depreciable business
assets.
TITLE III--INCREASING GLOBAL COMPETITIVENESS
Subtitle A--United States-Taiwan Expedited Double-Tax Relief Act
Sec. 301. Short title.
Sec. 302. Special rules for taxation of certain residents of Taiwan.
Subtitle B--United States-Taiwan Tax Agreement Authorization Act
Sec. 311. Short title.
Sec. 312. Definitions.
Sec. 313. Authorization to negotiate and enter into agreement.
Sec. 314. Consultations with Congress.
Sec. 315. Approval and implementation of agreement.
Sec. 316. Submission to Congress of agreement and implementation
policy.
Sec. 317. Consideration of approval legislation and implementing
legislation.
Sec. 318. Relationship of agreement to Internal Revenue Code of 1986.
Sec. 319. Authorization of subsequent tax agreements relative to
Taiwan.
Sec. 320. United States treatment of double taxation matters with
respect to Taiwan.
TITLE IV--ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES
Sec. 401. Short title.
Sec. 402. Extension of rules for treatment of certain disaster-related
personal casualty losses.
Sec. 403. Exclusion from gross income for compensation for losses or
damages resulting from certain wildfires.
Sec. 404. East Palestine disaster relief payments.
TITLE V--MORE AFFORDABLE HOUSING
Sec. 501. State housing credit ceiling increase for low-income housing
credit.
Sec. 502. Tax-exempt bond financing requirement.
TITLE VI--TAX ADMINISTRATION AND ELIMINATING FRAUD
Sec. 601. Increase in threshold for requiring information reporting
with respect to certain payees.
Sec. 602. Enforcement provisions with respect to COVID-related employee
retention credits.
TITLE I--TAX RELIEF FOR WORKING FAMILIES
SEC. 101. PER-CHILD CALCULATION OF REFUNDABLE PORTION OF
CHILD TAX CREDIT.
(a) In General.--Subparagraph (A) of section 24(h)(5) is
amended to read as follows:
``(A) In general.--In applying subsection (d)--
``(i) the amount determined under paragraph (1)(A) of such
subsection with respect to any qualifying child shall not
exceed $1,400, and such paragraph shall be applied without
regard to paragraph (4) of this subsection, and
``(ii) paragraph (1)(B) of such subsection shall be applied
by multiplying each of--
``(I) the amount determined under clause (i) thereof, and
``(II) the excess determined under clause (ii) thereof,
by the number of qualifying children of the taxpayer.''.
(b) Conforming Amendment.--The heading of paragraph (5) of
section 24(h) is amended by striking ``Maximum amount of''
and inserting ``Special rules for''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 102. INCREASE IN REFUNDABLE PORTION.
(a) In General.--Paragraph (5) of section 24(h) is amended
by redesignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new
subparagraph:
``(B) Amounts for 2023, 2024, and 2025.--In the case of a
taxable year beginning after 2022, subparagraph (A) shall be
applied by substituting for `$1,400'--
``(i) in the case of taxable year 2023, `$1,800',
``(ii) in the case of taxable year 2024, `$1,900', and
``(iii) in the case of taxable year 2025, `$2,000'.''.
(b) Conforming Amendment.--Subparagraph (C) of section
24(h)(5), as redesignated by subsection (a), is amended by
inserting ``and before 2023'' after ``2018''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 103. INFLATION OF CREDIT AMOUNT.
(a) In General.--Paragraph (2) of section 24(h) is
amended--
(1) by striking ``amount.--Subsection'' and inserting
``amount.--
``(A) In general.--Subsection'', and
(2) by adding at the end the following new subparagraph:
``(B) Adjustment for inflation.--In the case of a taxable
year beginning after 2023, the $2,000 amounts in subparagraph
(A) and paragraph (5)(B)(iii) shall each be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `2022' for `2016' in
subparagraph (A)(ii) thereof.
If any increase under this clause is not a multiple of $100,
such increase shall be rounded to the next lowest multiple of
$100.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2023.
SEC. 104. RULE FOR DETERMINATION OF EARNED INCOME.
(a) In General.--Paragraph (6) of section 24(h) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``credit.--Subsection'' and inserting
``credit.--
``(A) In general.--Subsection'', and
(2) by adding at the end the following new subparagraphs
``(B) Rule for determination of earned income.--
``(i) In general.--In the case of a taxable year beginning
after 2023, if the earned income of the taxpayer for such
taxable year is less than the earned income of the taxpayer
for the preceding taxable year, subsection (d)(1)(B)(i) may,
at the election of the taxpayer, be applied by substituting--
``(I) the earned income for such preceding taxable year,
for
``(II) the earned income for the current taxable year.
``(ii) Application to joint returns.--For purposes of
clause (i), in the case of a joint return, the earned income
of the taxpayer for the preceding taxable year shall be the
sum of the earned income of each spouse for such preceding
taxable year.''.
(b) Errors Treated as Mathematical Errors.--Paragraph (2)
of section 6213(g) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of subparagraph (U),
by striking the period at the end of subparagraph (V) and
inserting ``, and'', and by inserting after subparagraph (V)
the following new subparagraph:
``(W) in the case of a taxpayer electing the application of
section 24(h)(6)(B) for any taxable year, an entry on a
return of earned income pursuant to such section which is
inconsistent with the amount of such earned income determined
by the Secretary for the preceding taxable year.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2023.
SEC. 105. SPECIAL RULE FOR CERTAIN EARLY-FILED 2023 RETURNS.
In the case of an individual who claims, on the taxpayer's
return of tax for the first taxable
[[Page H344]]
year beginning after December 31, 2022, a credit under
section 24 of the Internal Revenue Code of 1986 which is
determined without regard to the amendments made by sections
101 and 102 of this Act, the Secretary of the Treasury (or
the Secretary's delegate) shall, to the maximum extent
practicable--
(1) redetermine the amount of such credit (after taking
into account such amendments) on the basis of the information
provided by the taxpayer on such return, and
(2) to the extent that such redetermination results in an
overpayment of tax, credit or refund such overpayment as
expeditiously as possible.
TITLE II--AMERICAN INNOVATION AND GROWTH
SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EXPERIMENTAL
EXPENDITURES.
(a) Delay of Amortization of Domestic Research and
Experimental Expenditures.--Section 174 is amended by adding
at the end the following new subsection:
``(e) Suspension of Application of Section to Domestic
Research and Experimental Expenditures.--In the case of any
domestic research or experimental expenditures (as defined in
section 174A(b)), this section--
``(1) shall apply to such expenditures paid or incurred in
taxable years beginning after December 31, 2025, and
``(2) shall not apply to such expenditures paid or incurred
in taxable years beginning on or before such date.''.
(b) Reinstatement of Expensing for Domestic Research and
Experimental Expenditures.--Part VI of subchapter B of
chapter 1 is amended by inserting after section 174 the
following new section:
``SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH AND
EXPERIMENTAL EXPENDITURES.
``(a) Treatment as Expenses.--Notwithstanding section 263,
there shall be allowed as a deduction any domestic research
or experimental expenditures which are paid or incurred by
the taxpayer during the taxable year.
``(b) Domestic Research or Experimental Expenditures.--For
purposes of this section, the term `domestic research or
experimental expenditures' means research or experimental
expenditures paid or incurred by the taxpayer in connection
with the taxpayer's trade or business other than such
expenditures which are attributable to foreign research
(within the meaning of section 41(d)(4)(F)).
``(c) Amortization of Certain Domestic Research and
Experimental Expenditures.--
``(1) In general.--At the election of the taxpayer, made in
accordance with regulations or other guidance provided by the
Secretary, in the case of domestic research or experimental
expenditures which would (but for subsection (a)) be
chargeable to capital account but not chargeable to property
of a character which is subject to the allowance under
section 167 (relating to allowance for depreciation, etc.) or
section 611 (relating to allowance for depletion), subsection
(a) shall not apply and the taxpayer shall--
``(A) charge such expenditures to capital account, and
``(B) be allowed an amortization deduction of such
expenditures ratably over such period of not less than 60
months as may be selected by the taxpayer (beginning with the
month in which the taxpayer first realizes benefits from such
expenditures).
``(2) Time for and scope of election.--The election
provided by paragraph (1) may be made for any taxable year,
but only if made not later than the time prescribed by law
for filing the return for such taxable year (including
extensions thereof). The method so elected, and the period
selected by the taxpayer, shall be adhered to in computing
taxable income for the taxable year for which the election is
made and for all subsequent taxable years unless, with the
approval of the Secretary, a change to a different method (or
to a different period) is authorized with respect to part or
all of such expenditures. The election shall not apply to any
expenditure paid or incurred during any taxable year before
the taxable year for which the taxpayer makes the election.
``(d) Election to Capitalize Expenses.--In the case of a
taxpayer which elects (at such time and in such manner as the
Secretary may provide) the application of this subsection,
subsections (a) and (c) shall not apply and domestic research
or experimental expenditures shall be chargeable to capital
account. Such election shall not apply to any expenditure
paid or incurred during any taxable year before the taxable
year for which the taxpayer makes the election and may be
made with respect to part of the expenditures paid or
incurred during any taxable year only with the approval of
the Secretary.
``(e) Special Rules.--
``(1) Land and other property.--This section shall not
apply to any expenditure for the acquisition or improvement
of land, or for the acquisition or improvement of property to
be used in connection with the research or experimentation
and of a character which is subject to the allowance under
section 167 (relating to allowance for depreciation, etc.) or
section 611 (relating to allowance for depletion); but for
purposes of this section allowances under section 167, and
allowances under section 611, shall be considered as
expenditures.
``(2) Exploration expenditures.--This section shall not
apply to any expenditure paid or incurred for the purpose of
ascertaining the existence, location, extent, or quality of
any deposit of ore or other mineral (including oil and gas).
``(3) Software development.--For purposes of this section,
any amount paid or incurred in connection with the
development of any software shall be treated as a research or
experimental expenditure.
``(f) Termination.--
``(1) In general.--This section shall not apply to amounts
paid or incurred in taxable years beginning after December
31, 2025.
``(2) Change in method of accounting.--In the case of a
taxpayer's first taxable year beginning after December 31,
2025, paragraph (1) (and the corresponding application of
section 174) shall be treated as a change in method of
accounting for purposes of section 481 and--
``(A) such change shall be treated as initiated by the
taxpayer,
``(B) such change shall be treated as made with the consent
of the Secretary, and
``(C) such change shall be applied only on a cut-off basis
for any domestic research or experimental expenditures paid
or incurred in taxable years beginning after December 31,
2025, and no adjustment under section 481(a) shall be
made.''.
(c) Coordination With Certain Other Provisions.--
(1) Research credit.--
(A) Section 41(d)(1)(A) is amended by inserting ``or
domestic research or experimental expenditures under section
174A'' after ``section 174''.
(B) Section 280C(c)(1) is amended to read as follows:
``(1) In general.--The domestic research or experimental
expenditures otherwise taken into account under section 174
or 174A (as the case may be) shall be reduced by the amount
of the credit allowed under section 41(a).''.
(2) AMT adjustment.--Section 56(b)(2) is amended by
striking ``174(a)'' each place it appears and inserting
``174A(a)''.
(3) Optional 10-year writeoff.--Section 59(e)(2)(B) is
amended by striking ``section 174(a) (relating to research
and experimental expenditures)'' and inserting ``section
174A(a) (relating to temporary rules for domestic research
and experimental expenditures)''.
(4) Qualified small issue bonds.--Section 144(a)(4)(C)(iv)
is amended by striking ``174(a)'' and inserting ``174A(a)''.
(5) Start-up expenditures.--Section 195(c)(1) is amended by
striking ``or 174'' in the last sentence and inserting ``174,
or 174A''.
(6) Capital expenditures.--
(A) Section 263(a)(1)(B) is amended by inserting `` or
174A'' after ``174''.
(B) Section 263A(c)(2) is amended by inserting ``or 174A''
after ``174''.
(7) Active business computer software royalties.--Section
543(d)(4)(A)(i) is amended by inserting ``174A,'' after
``174,''.
(8) Source rules.--Section 864(g)(2) is amended in the last
sentence--
(A) by striking ``treated as deferred expenses under
subsection (b) of section 174'' and inserting ``allowed as an
amortization deduction under section 174(a) or section
174A(c),'', and
(B) by striking ``such subsection'' and inserting ``such
section (as the case may be)''.
(9) Basis adjustment.--Section 1016(a)(14) is amended by
striking ``deductions as deferred expenses under section
174(b)(1) (relating to research and experimental
expenditures)'' and inserting ``deductions under section 174
or 174A''.
(10) Small business stock.--Section 1202(e)(2)(B) is
amended by striking ``research and experimental expenditures
under section 174'' and inserting ``specified research or
experimental expenditures under section 174 or domestic
research or experimental expenditures under section 174A''.
(d) Conforming Amendments.--
(1) Section 13206 of Public Law 115-97 is amended by
striking subsection (b) (relating to change in method of
accounting).
(2) The table of sections for part VI of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 174 the following new item:
``Sec. 174A. Temporary rules for domestic research and experimental
expenditures.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to amounts paid or incurred in taxable years beginning after
December 31, 2021.
(2) Coordination with research credit.--The amendment made
by subsection (c)(1)(B) shall apply to taxable years
beginning after December 31, 2022.
(3) Repeal of superceded change in method of accounting
rules.--The amendment made by subsection (d)(1) shall take
effect as if included in Public Law 115-97.
(4) No inference with respect to coordination with research
credit for prior periods.--The amendment made by subsection
(c)(1)(B) shall not be construed to create any inference with
respect to the proper application of section 280C(c) of the
Internal Revenue Code of 1986 with respect to taxable years
beginning before January 1, 2023.
(f) Transition Rules.--
(1) In general.--Except as otherwise provided by the
Secretary, an election made under subsection (c) or (d) of
section 174A of the Internal Revenue Code of 1986 (as added
by this section) for the taxpayer's first taxable year
beginning after December 31, 2021, shall not fail to be
treated as timely made (or as made on the return) if made
during the 1-year period beginning on the date of the
enactment of this Act on an amended return for the taxpayer's
first taxable year beginning after December 31, 2021, or in
such other manner as the Secretary may provide.
(2) Election regarding treatment as change in method of
accounting.--In the case of any taxpayer which (as of the
date of the enactment of this Act) had adopted a method of
accounting provided by section 174 of the Internal Revenue
Code of 1986 (as in effect prior to the amendments made by
this section) for the taxpayer's first taxable year beginning
after December 31, 2021, and elects the application of this
paragraph--
[[Page H345]]
(A) the amendments made by this section shall be treated as
a change in method of accounting for purposes of section 481
of such Code,
(B) such change shall be treated as initiated by the
taxpayer for the taxpayer's immediately succeeding taxable
year,
(C) such change shall be treated as made with the consent
of the Secretary,
(D) such change shall be applied on a modified cut-off
basis, taking into account for purposes of section 481(a) of
such Code only the domestic research or experimental
expenditures (as defined in section 174A(b) of such Code (as
added by this section) and determined by applying the rules
of section 174A(e) of such Code) paid or incurred in the
taxpayer's first taxable year beginning after December 31,
2021, and not allowed as a deduction in such taxable year,
and
(E) in the case of a taxpayer which elects the application
of this subparagraph, the amount of such change (as
determined under subparagraph (D)) shall be taken into
account ratably over the 2-taxable-year period beginning with
the taxable year referred to in subparagraph (B).
(3) Election regarding 10-year writeoff.--
(A) In general.--Except as otherwise provided by the
Secretary, an eligible taxpayer which files, during the 1-
year period beginning on the date of the enactment of this
Act, an amended income tax return for the taxable year
described in subparagraph (B)(ii) may elect the application
of section 59(e) of the Internal Revenue Code of 1986 with
respect to qualified expenditures described in section
59(e)(2)(B) of such Code (as amended by subsection (c)(3))
with respect to such taxable year. Such election shall be
filed with such amended income tax return and shall be
effective only to the extent that such election would have
been effective if filed with the original income tax return
for such taxable year (determined after taking into account
the amendment made by subsection (c)(3)).
(B) Eligible taxpayer.--For purposes of subparagraph (A),
the term ``eligible taxpayer'' means any taxpayer which--
(i) does not elect the application of paragraph (2), and
(ii) filed an income tax return for such taxpayer's first
taxable year beginning after December 31, 2021, before the
earlier of--
(I) the due date for such return, and
(II) the date of the enactment of this Act.
(4) Election regarding coordination with research credit.--
Except as otherwise provided by the Secretary, an eligible
taxpayer (as defined in paragraph (3)(B) without regard to
clause (i) thereof) which files, during the 1-year period
beginning on the date of the enactment of this Act, an
amended income tax return for the taxpayer's first taxable
year beginning after December 31, 2021, may, notwithstanding
subparagraph (C) of section 280C(c)(2) of the Internal
Revenue Code of 1986 make, or revoke, on such amended return
the election under such section for such taxable year.
SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION,
AMORTIZATION, OR DEPLETION IN DETERMINING THE
LIMITATION ON BUSINESS INTEREST.
(a) In General.--Section 163(j)(8)(A)(v) is amended by
striking ``January 1, 2022'' and inserting ``January 1,
2026''.
(b) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall apply to
taxable years beginning after December 31, 2023.
(2) Election to apply extension retroactively.--In the case
of a taxpayer which elects (at such time and in such manner
as the Secretary may provide) the application of this
paragraph, paragraph (1) shall be applied by substituting
``December 31, 2021'' for ``December 31, 2023''.
SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIATION.
(a) In General.--Section 168(k)(6)(A) is amended--
(1) in clause (i)--
(A) by striking ``2023'' and inserting ``2026'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(b) Property With Longer Production Periods.--Section
168(k)(6)(B) is amended--
(1) in clause (i)--
(A) by striking ``2024'' and inserting ``2027'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(c) Plants Bearing Fruits and Nuts.--Section 168(k)(6)(C)
is amended--
(1) in clause (i)--
(A) by striking ``2023'' and inserting ``2026'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to property placed in service after December 31, 2022.
(2) Plants bearing fruits and nuts.--The amendments made by
subsection (c) shall apply to specified plants planted or
grafted after December 31, 2022.
SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DEPRECIABLE
BUSINESS ASSETS.
(a) In General.--Section 179(b) is amended--
(1) by striking ``$1,000,000'' in paragraph (1) and
inserting ``$1,290,000'', and
(2) by striking ``$2,500,000'' in paragraph (2) and
inserting ``$3,220,000''.
(b) Inflation Adjustment.--Section 179(b)(6) is amended--
(1) by striking ``2018'' and inserting ``2024 (2018 in the
case of the dollar amount in paragraph (5)(A))'', and
(2) by striking `` `calendar year 2017'' and inserting ``
`calendar year 2024' (`calendar year 2017' in the case of the
dollar amount in paragraph (5)(A))''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service in taxable years
beginning after December 31, 2023.
TITLE III--INCREASING GLOBAL COMPETITIVENESS
Subtitle A--United States-Taiwan Expedited Double-Tax Relief Act
SEC. 301. SHORT TITLE.
This subtitle may be cited as the ``United States-Taiwan
Expedited Double-Tax Relief Act''.
SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN RESIDENTS OF
TAIWAN.
(a) In General.--Subpart D of part II of subchapter N of
chapter 1 is amended by inserting after section 894 the
following new section:
``SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF TAIWAN.
``(a) Certain Income From United States Sources.--
``(1) Interest, dividends, and royalties, etc.--
``(A) In general.--In the case of interest (other than
original issue discount), dividends, royalties, amounts
described in section 871(a)(1)(C), and gains described in
section 871(a)(1)(D) received by or paid to a qualified
resident of Taiwan--
``(i) sections 871(a), 881(a), 1441(a), 1441(c)(5), and
1442(a) shall each be applied by substituting `the applicable
percentage (as defined in section 894A(a)(1)(C))' for `30
percent' each place it appears, and
``(ii) sections 871(a), 881(a), and 1441(c)(1) shall each
be applied by substituting `a United States permanent
establishment of a qualified resident of Taiwan' for `a trade
or business within the United States' each place it appears.
``(B) Exceptions.--
``(i) In general.--Subparagraph (A) shall not apply to--
``(I) any dividend received from or paid by a real estate
investment trust which is not a qualified REIT dividend,
``(II) any amount subject to section 897,
``(III) any amount received from or paid by an expatriated
entity (as defined in section 7874(a)(2)) to a foreign
related person (as defined in section 7874(d)(3)), and
``(IV) any amount which is included in income under section
860C to the extent that such amount does not exceed an excess
inclusion with respect to a REMIC.
``(ii) Qualified reit dividend.--For purposes of clause
(i)(I), the term `qualified REIT dividend' means any dividend
received from or paid by a real estate investment trust if
such dividend is paid with respect to a class of shares that
is publicly traded and the recipient of the dividend is a
person who holds an interest in any class of shares of the
real estate investment trust of not more than 5 percent.
``(C) Applicable percentage.--For purposes of applying
subparagraph (A)(i)--
``(i) In general.--Except as provided in clause (ii), the
term `applicable percentage' means 10 percent.
``(ii) Special rules for dividends.-- In the case of any
dividend in respect of stock received by or paid to a
qualified resident of Taiwan, the applicable percentage shall
be 15 percent (10 percent in the case of a dividend which
meets the requirements of subparagraph (D) and is received by
or paid to an entity taxed as a corporation in Taiwan).
``(D) Requirements for lower dividend rate.--
``(i) In general.--The requirements of this subparagraph
are met with respect to any dividend in respect of stock in a
corporation if, at all times during the 12-month period
ending on the date such stock becomes ex-dividend with
respect to such dividend--
``(I) the dividend is derived by a qualified resident of
Taiwan, and
``(II) such qualified resident of Taiwan has held directly
at least 10 percent (by vote and value) of the total
outstanding shares of stock in such corporation.
For purposes of subclause (II), a person shall be treated as
directly holding a share of stock during any period described
in the preceding sentence if the share was held by a
corporation from which such person later acquired that share
and such corporation was, at the time the share was acquired,
both a connected person to such person and a qualified
resident of Taiwan.
``(ii) Exception for rics and reits.--Notwithstanding
clause (i), the requirements of this subparagraph shall not
be treated as met with respect to any dividend paid by a
regulated investment company or a real estate investment
trust.
``(2) Qualified wages.--
``(A) In general.--No tax shall be imposed under this
chapter (and no amount shall be withheld under section
1441(a) or chapter 24) with respect to qualified wages paid
to a qualified resident of Taiwan who--
``(i) is not a resident of the United States (determined
without regard to subsection (c)(3)(E)), or
``(ii) is employed as a member of the regular component of
a ship or aircraft operated in international traffic.
``(B) Qualified wages.--
``(i) In general.--The term `qualified wages' means wages,
salaries, or similar remunerations with respect to employment
involving the performance of personal services within the
United States which--
``(I) are paid by (or on behalf of) any employer other than
a United States person, and
[[Page H346]]
``(II) are not borne by a United States permanent
establishment of any person other than a United States
person.
``(ii) Exceptions.--Such term shall not include directors'
fees, income derived as an entertainer or athlete, income
derived as a student or trainee, pensions, amounts paid with
respect to employment with the United States, any State (or
political subdivision thereof), or any possession of the
United States (or any political subdivision thereof), or
other amounts specified in regulations or guidance under
subsection (f)(1)(F).
``(3) Income derived from entertainment or athletic
activities.--
``(A) In general.--No tax shall be imposed under this
chapter (and no amount shall be withheld under section
1441(a) or chapter 24) with respect to income derived by an
entertainer or athlete who is a qualified resident of Taiwan
from personal activities as such performed in the United
States if the aggregate amount of gross receipts from such
activities for the taxable year do not exceed $30,000.
``(B) Exception.--Subparagraph (A) shall not apply with
respect to--
``(i) income which is qualified wages (as defined in
paragraph (2)(B), determined without regard to clause (ii)
thereof), or
``(ii) income which is effectively connected with a United
States permanent establishment.
``(b) Income Connected With a United States Permanent
Establishment of a Qualified Resident of Taiwan.--
``(1) In general.--
``(A) In general.--In lieu of applying sections 871(b) and
882, a qualified resident of Taiwan that carries on a trade
or business within the United States through a United States
permanent establishment shall be taxable as provided in
section 1, 11, 55, or 59A, on its taxable income which is
effectively connected with such permanent establishment.
``(B) Determination of taxable income.--In determining
taxable income for purposes of paragraph (1), gross income
includes only gross income which is effectively connected
with the permanent establishment.
``(2) Treatment of dispositions of united states real
property.--In the case of a qualified resident of Taiwan,
section 897(a) shall be applied--
``(A) by substituting `carried on a trade or business
within the United States through a United States permanent
establishment' for `were engaged in a trade or business
within the United States', and
``(B) by substituting `such United States permanent
establishment' for `such trade or business'.
``(3) Treatment of branch profits taxes.--In the case of
any corporation which is a qualified resident of Taiwan,
section 884 shall be applied--
``(A) by substituting `10 percent' for `30 percent ' in
subsection (a) thereof, and
``(B) by substituting `a United States permanent
establishment of a qualified resident of Taiwan' for `the
conduct of a trade or business within the United States' in
subsection (d)(1) thereof.
``(4) Special rule with respect to income derived from
certain entertainment or athletic activities.--
``(A) In general.--Paragraph (1) shall not apply to the
extent that the income is derived--
``(i) in respect of entertainment or athletic activities
performed in the United States, and
``(ii) by a qualified resident of Taiwan who is not the
entertainer or athlete performing such activities.
``(B) Exception.--Subparagraph (A) shall not apply if the
person described in subparagraph (A)(ii) is contractually
authorized to designate the individual who is to perform such
activities.
``(5) Special rule with respect to certain amounts.--
Paragraph (1) shall not apply to any income which is wages,
salaries, or similar remuneration with respect to employment
or with respect to any amount which is described in
subsection (a)(2)(B)(ii).
``(c) Qualified Resident of Taiwan.--For purposes of this
section--
``(1) In general.--The term `qualified resident of Taiwan'
means any person who--
``(A) is liable to tax under the laws of Taiwan by reason
of such person's domicile, residence, place of management,
place of incorporation, or any similar criterion,
``(B) is not a United States person (determined without
regard to paragraph (3)(E)), and
``(C) in the case of an entity taxed as a corporation in
Taiwan, meets the requirements of paragraph (2).
``(2) Limitation on benefits for corporate entities of
taiwan.--
``(A) In general.--Subject to subparagraphs (E) and (F), an
entity meets the requirements of this paragraph only if it--
``(i) meets the ownership and income requirements of
subparagraph (B),
``(ii) meets the publicly traded requirements of
subparagraph (C), or
``(iii) meets the qualified subsidiary requirements of
subparagraph (D).
``(B) Ownership and income requirements.--The requirements
of this subparagraph are met for an entity if--
``(i) at least 50 percent (by vote and value) of the total
outstanding shares of stock in such entity are owned directly
or indirectly by qualified residents of Taiwan, and
``(ii) less than 50 percent of such entity's gross income
(and in the case of an entity that is a member of a tested
group, less than 50 percent of the tested group's gross
income) is paid or accrued, directly or indirectly, in the
form of payments that are deductible for purposes of the
income taxes imposed by Taiwan, to persons who are not--
``(I) qualified residents of Taiwan, or
``(II) United States persons who meet such requirements
with respect to the United States as determined by the
Secretary to be equivalent to the requirements of this
subsection (determined without regard to paragraph (1)(B))
with respect to residents of Taiwan.
``(C) Publicly traded requirements.--An entity meets the
requirements of this subparagraph if--
``(i) the principal class of its shares (and any
disproportionate class of shares) of such entity are
primarily and regularly traded on an established securities
market in Taiwan, or
``(ii) the primary place of management and control of the
entity is in Taiwan and all classes of its outstanding shares
described in clause (i) are regularly traded on an
established securities market in Taiwan.
``(D) Qualified subsidiary requirements.--An entity meets
the requirement of this subparagraph if--
``(i) at least 50 percent (by vote and value) of the total
outstanding shares of the stock of such entity are owned
directly or indirectly by 5 or fewer entities--
``(I) which meet the requirements of subparagraph (C), or
``(II) which are United States persons the principal class
of the shares (and any disproportionate class of shares) of
which are primarily and regularly traded on an established
securities market in the United States, and
``(ii) the entity meets the requirements of clause (ii) of
subparagraph (B).
``(E) Only indirect ownership through qualifying
intermediaries counted.--
``(i) In general.--Stock in an entity owned by a person
indirectly through 1 or more other persons shall not be
treated as owned by such person in determining whether the
person meets the requirements of subparagraph (B)(i) or
(D)(i) unless all such other persons are qualifying
intermediate owners.
``(ii) Qualifying intermediate owners.--The term
`qualifying intermediate owner' means a person that is--
``(I) a qualified resident of Taiwan, or
``(II) a resident of any other foreign country (other than
a foreign country that is a foreign country of concern) that
has in effect a comprehensive convention with the United
States for the avoidance of double taxation.
``(iii) Special rule for qualified subsidiaries.--For
purposes of applying subparagraph (D)(i), the term
`qualifying intermediate owner' shall include any person who
is a United States person who meets such requirements with
respect to the United States as determined by the Secretary
to be equivalent to the requirements of this subsection
(determined without regard to paragraph (1)(B)) with respect
to residents of Taiwan.
``(F) Certain payments not included.--In determining
whether the requirements of subparagraph (B)(ii) or (D)(ii)
are met with respect to an entity, the following payments
shall not be taken into account:
``(i) Arm's-length payments by the entity in the ordinary
course of business for services or tangible property.
``(ii) In the case of a tested group, intra-group
transactions.
``(3) Dual residents.--
``(A) Rules for determination of status.--
``(i) In general.--An individual who is an applicable dual
resident and who is described in subparagraph (B), (C), or
(D) shall be treated as a qualified resident of Taiwan.
``(ii) Applicable dual resident.--For purposes of this
paragraph, the term `applicable dual resident' means an
individual who--
``(I) is not a United States citizen,
``(II) is a resident of the United States (determined
without regard to subparagraph (E)), and
``(III) would be a qualified resident of Taiwan but for
paragraph (1)(B).
``(B) Permanent home.--An individual is described in this
subparagraph if such individual--
``(i) has a permanent home available to such individual in
Taiwan, and
``(ii) does not have a permanent home available to such
individual in the United States.
``(C) Center of vital interests.--An individual is
described in this subparagraph if--
``(i) such individual has a permanent home available to
such individual in both Taiwan and the United States, and
``(ii) such individual's personal and economic relations
(center of vital interests) are closer to Taiwan than to the
United States.
``(D) Habitual abode.--An individual is described in this
subparagraph if--
``(i) such individual--
``(I) does not have a permanent home available to such
individual in either Taiwan or the United States, or
``(II) has a permanent home available to such individual in
both Taiwan and the United States but such individual's
center of vital interests under subparagraph (C)(ii) cannot
be determined, and
``(ii) such individual has a habitual abode in Taiwan and
not the United States.
``(E) United states tax treatment of qualified resident of
taiwan.--Notwithstanding section 7701, an individual who is
treated as a qualified resident of Taiwan by reason of this
paragraph for all or any portion of a taxable year shall not
be treated as a resident of the United States for purposes of
computing such individual's United States income tax
liability for such taxable year or portion thereof.
``(4) Rules of special application.--
``(A) Dividends.--For purposes of applying this section to
any dividend, paragraph (2)(D) shall be applied without
regard to clause (ii) thereof.
``(B) Items of income emanating from an active trade or
business in taiwan.--For purposes of this section--
``(i) In general.--Notwithstanding the preceding paragraphs
of this subsection, if an entity taxed as a corporation in
Taiwan is not a
[[Page H347]]
qualified resident of Taiwan but meets the requirements of
subparagraphs (A) and (B) of paragraph (1), any qualified
item of income such entity derived from the United States
shall be treated as income of a qualified resident of Taiwan.
``(ii) Qualified items of income.--
``(I) In general.--The term `qualified item of income'
means any item of income which emanates from, or is
incidental to, the conduct of an active trade or business in
Taiwan (other than operating as a holding company, providing
overall supervision or administration of a group of
companies, providing group financing, or making or managing
investments (unless such making or managing investments is
carried on by a bank, insurance company, or registered
securities dealer in the ordinary course of its business as
such)).
``(II) Substantial activity requirement.--An item of income
which is derived from a trade or business conducted in the
United States or from a connected person shall be a qualified
item of income only if the trade or business activity
conducted in Taiwan to which the item is related is
substantial in relation to the same or a complementary trade
or business activity carried on in the United States. For
purposes of applying this subclause, activities conducted by
persons that are connected to the entity described in clause
(i) shall be deemed to be conducted by such entity.
``(iii) Exception.--This subparagraph shall not apply to
any item of income derived by an entity if at least 50
percent (by vote or value) of such entity is owned (directly
or indirectly) or controlled by residents of a foreign
country of concern.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) United states permanent establishment.--
``(A) In general.--The term `United States permanent
establishment' means, with respect to a qualified resident of
Taiwan, a permanent establishment of such resident which is
within the United States.
``(B) Special rule.--The determination of whether there is
a permanent establishment of a qualified resident of Taiwan
within the United States shall be made without regard to
whether an entity which is taxed as a corporation in Taiwan
and which is a qualified resident of Taiwan controls or is
controlled by--
``(i) a domestic corporation, or
``(ii) any other person that carries on business in the
United States (whether through a permanent establishment or
otherwise).
``(2) Permanent establishment.--
``(A) In general.--The term `permanent establishment' means
a fixed place of business through which a trade or business
is wholly or partly carried on. Such term shall include--
``(i) a place of management,
``(ii) a branch,
``(iii) an office,
``(iv) a factory,
``(v) a workshop, and
``(vi) a mine, an oil or gas well, a quarry, or any other
place of extraction of natural resources.
``(B) Special rules for certain temporary projects.--
``(i) In general.--A building site or construction or
installation project, or an installation or drilling rig or
ship used for the exploration or exploitation of the sea bed
and its subsoil and their natural resources, constitutes a
permanent establishment only if it lasts, or the activities
of the rig or ship lasts, for more than 12 months.
``(ii) Determination of 12-month period.--For purposes of
clause (i), the period over which a building site or
construction or installation project of a person lasts shall
include any period of more than 30 days during which such
person does not carry on activities at such building site or
construction or installation project but connected activities
are carried on at such building site or construction or
installation project by one or more connected persons.
``(C) Habitual exercise of contract authority treated as
permanent establishment.--Notwithstanding subparagraphs (A)
and (B), where a person (other than an agent of an
independent status to whom subparagraph (D)(ii) applies) is
acting on behalf of a trade or business of a qualified
resident of Taiwan and has and habitually exercises an
authority to conclude contracts that are binding on the trade
or business, that trade or business shall be deemed to have a
permanent establishment in the country in which such
authority is exercised in respect of any activities that the
person undertakes for the trade or business, unless the
activities of such person are limited to those described in
subparagraph (D)(i) that, if exercised through a fixed place
of business, would not make this fixed place of business a
permanent establishment under the provisions of that
subparagraph.
``(D) Exclusions.--
``(i) In general.--Notwithstanding subparagraphs (A) and
(B), the term `permanent establishment' shall not include--
``(I) the use of facilities solely for the purpose of
storage, display, or delivery of goods or merchandise
belonging to the trade or business,
``(II) the maintenance of a stock of goods or merchandise
belonging to the trade or business solely for the purpose of
storage, display, or delivery,
``(III) the maintenance of a stock of goods or merchandise
belonging to the trade or business solely for the purpose of
processing by another trade or business,
``(IV) the maintenance of a fixed place of business solely
for the purpose of purchasing goods or merchandise, or of
collecting information, for the trade or business,
``(V) the maintenance of a fixed place of business solely
for the purpose of carrying on, for the trade or business,
any other activity of a preparatory or auxiliary character,
or
``(VI) the maintenance of a fixed place of business solely
for any combination of the activities mentioned in subclauses
(I) through (V), provided that the overall activity of the
fixed place of business resulting from this combination is of
a preparatory or auxiliary character.
``(ii) Brokers and other independent agents.--A trade or
business shall not be considered to have a permanent
establishment in a country merely because it carries on
business in such country through a broker, general commission
agent, or any other agent of an independent status, provided
that such persons are acting in the ordinary course of their
business as independent agents.
``(3) Tested group.--The term `tested group' includes, with
respect to any entity taxed as a corporation in Taiwan, such
entity and any other entity taxed as a corporation in Taiwan
that--
``(A) participates as a member with such entity in a tax
consolidation, fiscal unity, or similar regime that requires
members of the group to share profits or losses, or
``(B) shares losses with such entity pursuant to a group
relief or other loss sharing regime.
``(4) Connected person.--Two persons shall be `connected
persons' if one owns, directly or indirectly, at least 50
percent of the interests in the other (or, in the case of a
corporation, at least 50 percent of the aggregate vote and
value of the corporation's shares) or another person owns,
directly or indirectly, at least 50 percent of the interests
(or, in the case of a corporation, at least 50 percent of the
aggregate vote and value of the corporation's shares) in each
person. In any case, a person shall be connected to another
if, based on all the relevant facts and circumstances, one
has control of the other or both are under the control of the
same person or persons.
``(5) Foreign country of concern.--The term `foreign
country of concern' has the meaning given such term under
paragraph (7) of section 9901 of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (15 U.S.C. 4651(7)), as added by section 103(a)(4) of
the CHIPS Act of 2022).
``(6) Partnerships; beneficiaries of estates and trusts.--
For purposes of this section--
``(A) a qualified resident of Taiwan which is a partner of
a partnership which carries on a trade or business within the
United States through a United States permanent establishment
shall be treated as carrying on such trade or business
through such permanent establishment, and
``(B) a qualified resident of Taiwan which is a beneficiary
of an estate or trust which carries on a trade or business
within the United States through a United States permanent
establishment shall be treated as carrying on such trade or
business through such permanent establishment.
``(7) Denial of benefits for certain payments through
hybrid entities.--For purposes of this section, rules similar
to the rules of section 894(c) shall apply.
``(e) Application.--
``(1) In general.--This section shall not apply to any
period unless the Secretary has determined that Taiwan has
provided benefits to United States persons for such period
that are reciprocal to the benefits provided to qualified
residents of Taiwan under this section.
``(2) Provision of reciprocity.--The President or his
designee is authorized to exchange letters, enter into an
agreement, or take other necessary and appropriate steps
relative to Taiwan for the reciprocal provision of the
benefits described in this section.
``(f) Regulations or Other Guidance.--
``(1) In general.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out the provisions of this section,
including such regulations or guidance for--
``(A) determining--
``(i) what constitutes a United States permanent
establishment of a qualified resident of Taiwan, and
``(ii) income that is effectively connected with such a
permanent establishment,
``(B) preventing the abuse of the provisions of this
section by persons who are not (or who should not be treated
as) qualified residents of Taiwan,
``(C) requirements for record keeping and reporting,
``(D) rules to assist withholding agents or employers in
determining whether a foreign person is a qualified resident
of Taiwan for purposes of determining whether withholding or
reporting is required for a payment (and, if withholding is
required, whether it should be applied at a reduced rate),
``(E) the application of subsection (a)(1)(D)(i) to stock
held by predecessor owners,
``(F) determining what amounts are to be treated as
qualified wages for purposes of subsection (a)(2),
``(G) determining the amounts to which subsection (a)(3)
applies,
``(H) defining established securities market for purposes
of subsection (c),
``(I) the application of the rules of subsection (c)(4)(B),
``(J) the application of subsection (d)(6) and section
1446,
``(K) determining ownership interests held by residents of
a foreign country of concern, and
``(L) determining the starting and ending dates for periods
with respect to the application of this section under
subsection (e), which may be separate dates for taxes
withheld at the source and other taxes.
``(2) Regulations to be consistent with model treaty.--Any
regulations or other guidance issued under this section
shall, to the extent practical, be consistent with the
provisions of the United States model income tax convention
dated February 7, 2016.''.
[[Page H348]]
(b) Conforming Amendment to Withholding Tax.--Subchapter A
of chapter 3 is amended by adding at the end the following
new section:
``SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF TAIWAN.
``For reduced rates of withholding for certain residents of
Taiwan, see section 894A.''.
(c) Clerical Amendments.--
(1) The table of sections for subpart D of part II of
subchapter N of chapter 1 is amended by inserting after the
item relating to section 894 the following new item:
``Sec. 894A. Special rules for qualified residents of Taiwan.''.
(2) The table of sections for subchapter A of chapter 3 is
amended by adding at the end the following new item:
``Sec. 1447. Withholding for qualified residents of Taiwan.''.
Subtitle B--United States-Taiwan Tax Agreement Authorization Act
SEC. 311. SHORT TITLE.
This subtitle may be cited as the ``United States-Taiwan
Tax Agreement Authorization Act''.
SEC. 312. DEFINITIONS.
In this subtitle:
(1) Agreement.--The term ``Agreement'' means the tax
agreement authorized by section 313(a).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Relations and the Committee on
Finance of the Senate; and
(B) the Committee on Ways and Means of the House of
Representatives.
(3) Approval legislation.--The term ``approval
legislation'' means legislation that approves the Agreement.
(4) Implementing legislation.--The term ``implementing
legislation'' means legislation that makes any changes to the
Internal Revenue Code of 1986 necessary to implement the
Agreement.
SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER INTO
AGREEMENT.
(a) In General.--Subsequent to a determination under
section 894A(e)(1) of the Internal Revenue Code of 1986 (as
added by the United States-Taiwan Expedited Double-Tax Relief
Act), the President is authorized to negotiate and enter into
a tax agreement relative to Taiwan.
(b) Elements of Agreement.--
(1) Conformity with bilateral income tax conventions.--The
President shall ensure that--
(A) any provisions included in the Agreement conform with
provisions customarily contained in United States bilateral
income tax conventions, as exemplified by the 2016 United
States Model Income Tax Convention; and
(B) the Agreement does not include elements outside the
scope of the 2016 United States Model Income Tax Convention.
(2) Incorporation of tax agreements and laws.--
Notwithstanding paragraph (1), the Agreement may incorporate
and restate provisions of any agreement, or existing United
States law, addressing double taxation for residents of the
United States and Taiwan.
(3) Authority.--The Agreement shall include the following
statement: ``The Agreement is entered into pursuant to the
United States-Taiwan Tax Agreement Authorization Act.''
(4) Entry into force.--The Agreement shall include a
provision conditioning entry into force upon--
(A) enactment of approval legislation and implementing
legislation pursuant to section 317; and
(B) confirmation by the Secretary of the Treasury that the
relevant authority in Taiwan has approved and taken
appropriate steps required to implement the Agreement.
SEC. 314. CONSULTATIONS WITH CONGRESS.
(a) Notification Upon Commencement of Negotiations.--The
President shall provide written notification to the
appropriate congressional committees of the commencement of
negotiations between the United States and Taiwan on the
Agreement at least 15 calendar days before commencing such
negotiations.
(b) Consultations During Negotiations.--
(1) Briefings.--Not later than 90 days after commencement
of negotiations with respect to the Agreement, and every 180
days thereafter until the President enters into the
Agreement, the President shall provide a briefing to the
appropriate congressional committees on the status of the
negotiations, including a description of elements under
negotiation.
(2) Meetings and other consultations.--
(A) In general.--In the course of negotiations with respect
to the Agreement, the Secretary of the Treasury, in
coordination with the Secretary of State, shall--
(i) meet, upon request, with the chairman or ranking member
of any of the appropriate congressional committees regarding
negotiating objectives and the status of negotiations in
progress; and
(ii) consult closely and on a timely basis with, and keep
fully apprised of the negotiations, the appropriate
congressional committees.
(B) Elements of consultations.--The consultations described
in subparagraph (A) shall include consultations with respect
to--
(i) the nature of the contemplated Agreement;
(ii) how and to what extent the contemplated Agreement is
consistent with the elements set forth in section 313(b); and
(iii) the implementation of the contemplated Agreement,
including--
(I) the general effect of the contemplated Agreement on
existing laws;
(II) proposed changes to any existing laws to implement the
contemplated Agreement; and
(III) proposed administrative actions to implement the
contemplated Agreement.
SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREEMENT.
(a) In General.--The Agreement may not enter into force
unless--
(1) the President, at least 60 days before the day on which
the President enters into the Agreement, publishes the text
of the contemplated Agreement on a publicly available website
of the Department of the Treasury; and
(2) there is enacted into law, with respect to the
Agreement, approval legislation and implementing legislation
pursuant to section 317.
(b) Entry Into Force.--The President may provide for the
Agreement to enter into force upon--
(1) enactment of approval legislation and implementing
legislation pursuant to section 317; and
(2) confirmation by the Secretary of the Treasury that the
relevant authority in Taiwan has approved and taken
appropriate steps required to implement the Agreement.
SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND
IMPLEMENTATION POLICY.
(a) Submission of Agreement.--Not later than 270 days after
the President enters into the Agreement, the President or the
President's designee shall submit to Congress--
(1) the final text of the Agreement; and
(2) a technical explanation of the Agreement.
(b) Submission of Implementation Policy.--Not later than
270 days after the President enters into the Agreement, the
Secretary of the Treasury shall submit to Congress--
(1) a description of those changes to existing laws that
the President considers would be required in order to ensure
that the United States acts in a manner consistent with the
Agreement; and
(2) a statement of anticipated administrative action
proposed to implement the Agreement.
SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION AND
IMPLEMENTING LEGISLATION.
(a) In General.--The approval legislation with respect to
the Agreement shall include the following: ``Congress
approves the Agreement submitted to Congress pursuant to
section 316 of the United States-Taiwan Tax Agreement
Authorization Act on ____.'', with the blank space being
filled with the appropriate date.
(b) Approval Legislation Committee Referral.--The approval
legislation shall--
(1) in the Senate, be referred to the Committee on Foreign
Relations; and
(2) in the House of Representaives, be referred to the
Committee on Ways and Means.
(c) Implementing Legislation Committee Referral.--The
implementing legislation shall--
(1) in the Senate, be referred to the Committee on Finance;
and
(2) in the House of Representatives, be referred to the
Committee on Ways and Means.
SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL REVENUE CODE
OF 1986.
(a) Internal Revenue Code of 1986 to Control.--No provision
of the Agreement or approval legislation, nor the application
of any such provision to any person or circumstance, which is
inconsistent with any provision of the Internal Revenue Code
of 1986, shall have effect.
(b) Construction.--Nothing in this subtitle shall be
construed--
(1) to amend or modify any law of the United States; or
(2) to limit any authority conferred under any law of the
United States,
unless specifically provided for in this subtitle.
SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREEMENTS RELATIVE
TO TAIWAN.
(a) In General.--Subsequent to the enactment of approval
legislation and implementing legislation pursuant to section
317--
(1) the term ``tax agreement'' in section 313(a) shall be
treated as including any tax agreement relative to Taiwan
which supplements or supersedes the Agreement to which such
approval legislation and implementing legislation relates,
and
(2) the term ``Agreement'' shall be treated as including
such tax agreement.
(b) Requirements, etc., to Apply Separately.--The
provisions of this subtitle (including section 314) shall be
applied separately with respect to each tax agreement
referred to in subsection (a).
SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAXATION MATTERS
WITH RESPECT TO TAIWAN.
(a) Findings.--Congress makes the following findings:
(1) The United States addresses issues with respect to
double taxation with foreign countries by entering into
bilateral income tax conventions (known as tax treaties) with
such countries, subject to the advice and consent of the
Senate to ratification pursuant to article II of the
Constitution.
(2) The United States has entered into more than sixty such
tax treaties, which facilitate economic activity, strengthen
bilateral cooperation, and benefit United States workers,
businesses, and other United States taxpayers.
(3) Due to Taiwan's unique status, the United States is
unable to enter into an article II tax treaty with Taiwan,
necessitating an agreement to address issues with respect to
double taxation.
(b) Statement of Policy.--It is the policy of the United
States to--
(1) provide for additional bilateral tax relief with
respect to Taiwan, beyond that provided for in section 894A
of the Internal Revenue Code of 1986 (as added by the United
States-Taiwan Expedited Double-Tax Relief Act), only after
entry into force of an Agreement, as provided for in section
315, and only in a manner consistent with such Agreement; and
[[Page H349]]
(2) continue to provide for bilateral tax relief with
sovereign states to address double taxation and other related
matters through entering into bilateral income tax
conventions, subject to the Senate's advice and consent to
ratification pursuant to article II of the Constitution.
TITLE IV--ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES
SEC. 401. SHORT TITLE.
This title may be cited as the ``Federal Disaster Tax
Relief Act of 2024''.
SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CERTAIN
DISASTER-RELATED PERSONAL CASUALTY LOSSES.
For purposes of applying section 304(b) of the Taxpayer
Certainty and Disaster Tax Relief Act of 2020, section 301 of
such Act shall be applied by substituting ``the Federal
Disaster Tax Relief Act of 2024'' for ``this Act'' each place
it appears.
SEC. 403. EXCLUSION FROM GROSS INCOME FOR COMPENSATION FOR
LOSSES OR DAMAGES RESULTING FROM CERTAIN
WILDFIRES.
(a) In General.--For purposes of the Internal Revenue Code
of 1986, gross income shall not include any amount received
by an individual as a qualified wildfire relief payment.
(b) Qualified Wildfire Relief Payment.--For purposes of
this section--
(1) In general.--The term ``qualified wildfire relief
payment'' means any amount received by or on behalf of an
individual as compensation for losses, expenses, or damages
(including compensation for additional living expenses, lost
wages (other than compensation for lost wages paid by the
employer which would have otherwise paid such wages),
personal injury, death, or emotional distress) incurred as a
result of a qualified wildfire disaster, but only to the
extent the losses, expenses, or damages compensated by such
payment are not compensated for by insurance or otherwise.
(2) Qualified wildfire disaster.--The term ``qualified
wildfire disaster'' means any federally declared disaster (as
defined in section 165(i)(5)(A) of the Internal Revenue Code
of 1986) declared, after December 31, 2014, as a result of
any forest or range fire.
(c) Denial of Double Benefit.--Notwithstanding any other
provision of the Internal Revenue Code of 1986--
(1) no deduction or credit shall be allowed (to the person
for whose benefit a qualified wildfire relief payment is
made) for, or by reason of, any expenditure to the extent of
the amount excluded under this section with respect to such
expenditure, and
(2) no increase in the basis or adjusted basis of any
property shall result from any amount excluded under this
subsection with respect to such property.
(d) Limitation on Application.--This section shall only
apply to qualified wildfire relief payments received by the
individual during taxable years beginning after December 31,
2019, and before January 1, 2026.
SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS.
(a) Disaster Relief Payments to Victims of East Palestine
Train Derailment.--East Palestine train derailment payments
shall be treated as qualified disaster relief payments for
purposes of section 139(b) of the Internal Revenue Code of
1986.
(b) East Palestine Train Derailment Payments.--For purposes
of this section, the term ``East Palestine train derailment
payment'' means any amount received by or on behalf of an
individual as compensation for loss, damages, expenses, loss
in real property value, closing costs with respect to real
property (including realtor commissions), or inconvenience
(including access to real property) resulting from the East
Palestine train derailment if such amount was provided by--
(1) a Federal, State, or local government agency,
(2) Norfolk Southern Railway, or
(3) any subsidiary, insurer, or agent of Norfolk Southern
Railway or any related person.
(c) Train Derailment.--For purposes of this section, the
term ``East Palestine train derailment'' means the derailment
of a train in East Palestine, Ohio, on February 3, 2023.
(d) Effective Date.--This section shall apply to amounts
received on or after February 3, 2023.
TITLE V--MORE AFFORDABLE HOUSING
SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR LOW-
INCOME HOUSING CREDIT.
(a) In General.--Section 42(h)(3)(I) is amended--
(1) by striking ``and 2021,'' and inserting ``2021, 2023,
2024, and 2025,'', and
(2) by striking ``2018, 2019, 2020, and 2021'' in the
heading and inserting ``certain calendar years''.
(b) Effective Date.--The amendments made by this section
shall apply to calendar years after 2022.
SEC. 502. TAX-EXEMPT BOND FINANCING REQUIREMENT.
(a) In General.--Section 42(h)(4) is amended by striking
subparagraph (B) and inserting the following:
``(B) Special rule where minimum percent of buildings is
financed with tax-exempt bonds subject to volume cap.--For
purposes of subparagraph (A), paragraph (1) shall not apply
to any portion of the credit allowable under subsection (a)
with respect to a building if--
``(i) 50 percent or more of the aggregate basis of such
building and the land on which the building is located is
financed by 1 or more obligations described in subparagraph
(A), or
``(ii)(I) 30 percent or more of the aggregate basis of such
building and the land on which the building is located is
financed by 1 or more qualified obligations, and
``(II) 1 or more of such qualified obligations--
``(aa) are part of an issue the issue date of which is
after December 31, 2023, and
``(bb) provide the financing for not less than 5 percent of
the aggregate basis of such building and the land on which
the building is located.
``(C) Qualified obligation.--For purposes of subparagraph
(B)(ii), the term `qualified obligation' means an obligation
which is described in subparagraph (A) and which is part of
an issue the issue date of which is before January 1,
2026.''.
(b) Effective Date.--
(1) In general.--The amendment made by this section shall
apply to buildings placed in service in taxable years
beginning after December 31, 2023.
(2) Rehabilitation expenditures treated as separate new
building.--In the case of any building with respect to which
any expenditures are treated as a separate new building under
section 42(e) of the Internal Revenue Code of 1986, for
purposes of paragraph (1), both the existing building and the
separate new building shall be treated as having been placed
in service on the date such expenditures are treated as
placed in service under section 42(e)(4) of such Code.
TITLE VI--TAX ADMINISTRATION AND ELIMINATING FRAUD
SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING INFORMATION
REPORTING WITH RESPECT TO CERTAIN PAYEES.
(a) In General.--Sections 6041(a) is amended by striking
``$600'' and inserting ``$1,000''.
(b) Inflation Adjustment.--Section 6041 is amended by
adding at the end the following new subsection:
``(h) Inflation Adjustment.--In the case of any calendar
year after 2024, the dollar amount in subsection (a) shall be
increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year, determined by
substituting `calendar year 2023' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a
multiple of $100, such increase shall be rounded to the
nearest multiple of $100.''.
(c) Application to Reporting on Remuneration for Services
and Direct Sales.--Section 6041A is amended--
(1) in subsection (a)(2), by striking ``is $600 or more''
and inserting ``equals or exceeds the dollar amount in effect
for such calendar year under section 6041(a)'', and
(2) in subsection (b)(1)(B), by striking ``is $5,000 or
more'' and inserting ``equals or exceeds the dollar amount in
effect for such calendar year under section 6041(a)''.
(d) Application to Backup Withholding.--Section 3406(b)(6)
is amended--
(1) by striking ``$600'' in subparagraph (A) and inserting
``the dollar amount in effect for such calendar year under
section 6041(a)'', and
(2) by striking ``only where aggregate for calendar year is
$600 or more'' in the heading and inserting ``only if in
excess of threshold''.
(e) Conforming Amendments.--
(1) The heading of section 6041(a) is amended by striking
``of $600 or More'' and inserting ``Exceeding Threshold''.
(2) Section 6041(a) is amended by striking ``taxable year''
and inserting ``calendar year''.
(f) Effective Date.--The amendments made by this section
shall apply with respect to payments made after December 31,
2023.
SEC. 602. ENFORCEMENT PROVISIONS WITH RESPECT TO COVID-
RELATED EMPLOYEE RETENTION CREDITS.
(a) Increase in Assessable Penalty on COVID-ERTC Promoters
for Aiding and Abetting Understatements of Tax Liability.--
(1) In general.--If any COVID-ERTC promoter is subject to
penalty under section 6701(a) of the Internal Revenue Code of
1986 with respect to any COVID-ERTC document, notwithstanding
paragraphs (1) and (2) of section 6701(b) of such Code, the
amount of the penalty imposed under such section 6701(a)
shall be the greater of--
(A) $200,000 ($10,000, in the case of a natural person), or
(B) 75 percent of the gross income derived (or to be
derived) by such promoter with respect to the aid,
assistance, or advice referred to in section 6701(a)(1) of
such Code with respect to such document.
(2) No inference.--Paragraph (1) shall not be construed to
create any inference with respect to the proper application
of the knowledge requirement of section 6701(a)(3) of the
Internal Revenue Code of 1986.
(b) Failure to Comply With Due Diligence Requirements
Treated as Knowledge for Purposes of Assessable Penalty for
Aiding and Abetting Understatement of Tax Liability.--In the
case of any COVID-ERTC promoter, the knowledge requirement of
section 6701(a)(3) of the Internal Revenue Code of 1986 shall
be treated as satisfied with respect to any COVID-ERTC
document with respect to which such promoter provided aid,
assistance, or advice, if such promoter fails to comply with
the due diligence requirements referred to in subsection
(c)(1).
(c) Assessable Penalty for Failure to Comply With Due
Diligence Requirements.--
(1) In general.--Any COVID-ERTC promoter which provides
aid, assistance, or advice with respect to any COVID-ERTC
document and which fails to comply with due diligence
requirements imposed by the Secretary with respect to
determining eligibility for, or the amount of, any COVID-
related employee retention tax credit, shall pay a penalty of
$1,000 for each such failure.
[[Page H350]]
(2) Due diligence requirements.--Except as otherwise
provided by the Secretary, the due diligence requirements
referred to in paragraph (1) shall be similar to the due
diligence requirements imposed under section 6695(g).
(3) Restriction to documents used in connection with
returns or claims for refund.--Paragraph (1) shall not apply
with respect to any COVID-ERTC document unless such document
constitutes, or relates to, a return or claim for refund.
(4) Treatment as assessable penalty, etc.--For purposes of
the Internal Revenue Code of 1986, the penalty imposed under
paragraph (1) shall be treated in the same manner as a
penalty imposed under section 6695(g).
(5) Secretary.--For purposes of this subsection, the term
``Secretary'' means the Secretary of the Treasury or the
Secretary's delegate.
(d) Assessable Penalties for Failure to Disclose
Information, Maintain Client Lists, etc.--For purposes of
sections 6111, 6112, 6707 and 6708 of the Internal Revenue
Code of 1986--
(1) any COVID-related employee retention tax credit
(whether or not the taxpayer claims such COVID-related
employee retention tax credit) shall be treated as a listed
transaction (and as a reportable transaction) with respect to
any COVID-ERTC promoter if such promoter provides any aid,
assistance, or advice with respect to any COVID-ERTC document
relating to such COVID-related employee retention tax credit,
and
(2) such COVID-ERTC promoter shall be treated as a material
advisor with respect to such transaction.
(e) COVID-ERTC Promoter.--For purposes of this section--
(1) In general.--The term ``COVID-ERTC promoter'' means,
with respect to any COVID-ERTC document, any person which
provides aid, assistance, or advice with respect to such
document if--
(A) such person charges or receives a fee for such aid,
assistance, or advice which is based on the amount of the
refund or credit with respect to such document and, with
respect to such person's taxable year in which such person
provided such assistance or the preceding taxable year, the
aggregate gross receipts of such person for aid, assistance,
and advice with respect to all COVID-ERTC documents exceeds
20 percent of the gross receipts of such person for such
taxable year, or
(B) with respect to such person's taxable year in which
such person provided such assistance or the preceding taxable
year--
(i) the aggregate gross receipts of such person for aid,
assistance, and advice with respect to all COVID-ERTC
documents exceeds 50 percent of the gross receipts of such
person for such taxable year, or
(ii) both--
(I) such aggregate gross receipts exceeds 20 percent of the
gross receipts of such person for such taxable year, and
(II) the aggregate gross receipts of such person for aid,
assistance, and advice with respect to all COVID-ERTC
documents (determined after application of paragraph (3))
exceeds $500,000.
(2) Exception for certified professional employer
organizations.--The term ``COVID-ERTC promoter'' shall not
include a certified professional employer organization (as
defined in section 7705).
(3) Aggregation rule.--For purposes of paragraph
(1)(B)(ii)(II), all persons treated as a single employer
under subsection (a) or (b) of section 52 of the Internal
Revenue Code of 1986, or subsection (m) or (o) of section 414
of such Code, shall be treated as 1 person.
(4) Short taxable years.--In the case of any taxable year
of less than 12 months, paragraph (1) shall be applied with
respect to the calendar year in which such taxable year
begins (in addition to applying to such taxable year).
(f) COVID-ERTC Document.--For purposes of this section, the
term ``COVID-ERTC document'' means any return, affidavit,
claim, or other document related to any COVID-related
employee retention tax credit, including any document related
to eligibility for, or the calculation or determination of
any amount directly related to any COVID-related employee
retention tax credit.
(g) COVID-related Employee Retention Tax Credit.--For
purposes of this section, the term ``COVID-related employee
retention tax credit'' means--
(1) any credit, or advance payment, under section 3134 of
the Internal Revenue Code of 1986, and
(2) any credit, or advance payment, under section 2301 of
the CARES Act.
(h) Limitation on Credit and Refund of COVID-related
Employee Retention Tax Credits.--Notwithstanding section 6511
of the Internal Revenue Code of 1986 or any other provision
of law, no credit or refund of any COVID-related employee
retention tax credit shall be allowed or made after January
31, 2024, unless a claim for such credit or refund is filed
by the taxpayer on or before such date.
(i) Amendments to Extend Limitation on Assessment.--
(1) In general.--Section 3134(l) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(l) Extension of Limitation on Assessment.--
``(1) In general.--Notwithstanding section 6501, the
limitation on the time period for the assessment of any
amount attributable to a credit claimed under this section
shall not expire before the date that is 6 years after the
latest of--
``(A) the date on which the original return which includes
the calendar quarter with respect to which such credit is
determined is filed,
``(B) the date on which such return is treated as filed
under section 6501(b)(2), or
``(C) the date on which the claim for credit or refund with
respect to such credit is made.
``(2) Deduction for wages taken into account in determining
improperly claimed credit.--
``(A) In general.--Notwithstanding section 6511, in the
case of an assessment attributable to a credit claimed under
this section, the limitation on the time period for credit or
refund of any amount attributable to a deduction for
improperly claimed ERTC wages shall not expire before the
time period for such assessment expires under paragraph (1).
``(B) Improperly claimed ertc wages.--For purposes of this
paragraph, the term `improperly claimed ERTC wages' means,
with respect to an assessment attributable to a credit
claimed under this section, the wages with respect to which a
deduction would not have been allowed if the portion of the
credit to which such assessment relates had been properly
claimed.''.
(2) Application to cares act credit.--Section 2301 of the
CARES Act is amended by adding at the end the following new
subsection:
``(o) Extension of Limitation on Assessment.--
``(1) In general.--Notwithstanding section 6501 of the
Internal Revenue Code of 1986, the limitation on the time
period for the assessment of any amount attributable to a
credit claimed under this section shall not expire before the
date that is 6 years after the latest of--
``(A) the date on which the original return which includes
the calendar quarter with respect to which such credit is
determined is filed,
``(B) the date on which such return is treated as filed
under section 6501(b)(2) of such Code, or
``(C) the date on which the claim for credit or refund with
respect to such credit is made.
``(2) Deduction for wages taken into account in determining
improperly claimed credit.--
``(A) In general.--Notwithstanding section 6511 of such
Code, in the case of an assessment attributable to a credit
claimed under this section, the limitation on the time period
for credit or refund of any amount attributable to a
deduction for improperly claimed ERTC wages shall not expire
before the time period for such assessment expires under
paragraph (1).
``(B) Improperly claimed ertc wages.--For purposes of this
paragraph, the term `improperly claimed ERTC wages' means,
with respect to an assessment attributable to a credit
claimed under this section, the wages with respect to which a
deduction would not have been allowed if the portion of the
credit to which such assessment relates had been properly
claimed.''.
(j) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the provisions of this section shall apply to
aid, assistance, and advice provided after March 12, 2020.
(2) Due diligence requirements.--Subsections (b) and (c)
shall apply to aid, assistance, and advice provided after the
date of the enactment of this Act.
(3) Limitation on credit and refund of covid-related
employee retention tax credits.--Subsection (h) shall apply
to credits and refunds allowed or made after January 31,
2024.
(4) Amendments to extend limitation on assessment.--The
amendments made by subsection (i) shall apply to assessments
made after the date of the enactment of this Act.
(k) Transition Rule With Respect to Requirements to
Disclose Information, Maintain Client Lists, etc.--Any return
under section 6111 of the Internal Revenue Code of 1986, or
list under section 6112 of such Code, required by reason of
subsection (d) of this section to be filed or maintained,
respectively, with respect to any aid, assistance, or advice
provided by a COVID-ERTC promoter with respect to a COVID-
ERTC document before the date of the enactment of this Act,
shall not be required to be so filed or maintained (with
respect to such aid, assistance or advice) before the date
which is 90 days after such date.
(l) Provisions Not to Be Construed to Create Negative
Inferences.--
(1) No inference with respect to application of knowledge
requirement to pre-enactment conduct of covid-ertc promoters,
etc.--Subsection (b) shall not be construed to create any
inference with respect to the proper application of section
6701(a)(3) of the Internal Revenue Code of 1986 with respect
to any aid, assistance, or advice provided by any COVID-ERTC
promoter on or before the date of the enactment of this Act
(or with respect to any other aid, assistance, or advice to
which such subsection does not apply).
(2) Requirements to disclose information, maintain client
lists, etc.--Subsections (d) and (k) shall not be construed
to create any inference with respect to whether any COVID-
related employee retention tax credit is (without regard to
subsection (d)) a listed transaction (or reportable
transaction) with respect to any COVID-ERTC promoter; and,
for purposes of subsection (j), a return or list shall not be
treated as required (with respect to such aid, assistance, or
advice) by reason of subsection (d) if such return or list
would be so required without regard to subsection (d).
(m) Regulations.--The Secretary (as defined in subsection
(c)(5)) shall issue such regulations or other guidance as may
be necessary or appropriate to carry out the purposes of this
section (and the amendments made by this section).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Smith) and the gentleman from Massachusetts (Mr. Neal)
each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
Mr. ROY. Mr. Speaker, I claim the time in actual opposition to the
bill.
[[Page H351]]
The SPEAKER pro tempore. Is the gentleman from Massachusetts opposed
to the bill?
Mr. NEAL. Mr. Speaker, I am not opposed to the legislation, no. I am
not claiming time in opposition. That is the point.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Smith), and the gentleman from Texas (Mr. Roy) each will
control 20 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave
Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on the bill under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, the Tax Relief for American Families and Workers Act is
pro-growth, pro-jobs, pro-American.
The legislation locks in $600 billion in pro-growth tax policies by
restoring three key provisions from President Trump's successful 2017
tax reform that have a proven record of creating millions of jobs,
raising workers' wages, and sparking more investment and economic
growth right here at home.
This bill restores full R&D expensing, interest deductibility, and
100 percent expensing. Each of these policies will help American
businesses grow, create jobs, and sharpen their competitive advantage
against China.
This will create over $70 billion in new R&D investment and over
900,000 new jobs, increase small business investment by $400 billion,
and generate $58 billion in additional take-home pay for American
workers.
Today, America's small businesses are being pummeled by high prices
and interest rates. This package raises the expensing cap for small
businesses beyond the limit set in the 2017 tax reform, and it cuts
paperwork for those small businesses by updating the IRS form, last
changed when Eisenhower was President.
This bill is not only helping businesses here at home, but this tax
relief package also ensures America is standing with our key economic
partner, Taiwan, by ending double taxation on American workers and
businesses operating in both countries.
The child tax credit provisions reflect the same structure
established by the 2017 tax reform. We maintain work requirements while
enhancing the benefit to support families crushed by today's inflation
and remove the penalty for families with multiple children. It is both
pro-worker and pro-family.
The reforms include meaningful tax relief for those affected by
natural and manmade disasters and encourage more construction of safe,
affordable housing.
At the end of the day, we are replacing bad tax policy with good tax
policy by cutting off funding for the employee retention tax credit, a
COVID-era program that costs six times its original amount and is so
riddled with fraud that the IRS put it on its Dirty Dozen list of the
worst scams in America. This will save America taxpayers over $75
billion.
There is a reason that over 450 groups, representing Americans from
all walks of life, support this legislation. That includes job
creators, those supporting workers and families, and those defending
the right to life. It is a strong, commonsense, bipartisan step forward
in providing urgent tax relief for working families and small
businesses.
Parents and Main Street communities across this country will see
lower taxes, more opportunity, and greater financial security after we
pass this legislation.
I urge my colleagues to support this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. ROY. Mr. Speaker, I rise in opposition to this legislation, and I
do so reluctantly, because I know of the significant amount of work by
my friend from Missouri; by those, frankly, on both sides of the aisle
to reach agreement; and my friends on Ways and Means.
There are important provisions in this legislation that are critical
for job growth, for economic growth, and critical for the well-being of
our country. There are numerous businesses I know in Texas and around
this country that understand the importance of the expensing
provisions, the interest provisions, and research and development.
However, unfortunately, as happens in this town, this legislation
comes with provisions that the people I represent are tired of. They
are provisions that would continue to expand the welfare state--as The
Wall Street Journal editorialized about--by expanding the child tax
credit in ways that will continue to fund people directly through
refundable credits, which we find to be problematic, and we think
undermines the kind of economic activity and incentive to work and
incentive to produce value that we think is critically important for
economic growth.
Importantly, that provision is also available to parents who are here
in this country illegally with children born in the United States. We
think that is a problem. We think that is not just allowing,
essentially, birthright citizenship anchor babies, but funding it. That
is a problem.
Now, my colleagues on this side of the aisle will rejoin that that
was a product of the 2017 bill that was pushed by and passed by
Republicans, including President Trump, to which I say: Right. So what?
It is still wrong. It is still bad policy. We shouldn't do it, and we
should not be perpetuating it now.
All through the eleventh hour last night, I worked hard trying to
find a way to come up with a provision that might be palatable on both
sides of the aisle, this side of the aisle, to find a way to say: Let's
get that provision pulled off so we can move the pieces that will be
good for economic growth and prosperity that I think has bipartisan
support and clear support on this side of the aisle.
Unfortunately, we have not done that.
I am getting a lot of correspondence from people that I represent who
are sick of the same old game in this town. They are sick of everyone
saying that we are just going to keep doing the same thing, and that we
are going to, in this case, again, continue to expand the welfare state
in a way that entices people to come and benefit from the United States
illegally at a time when we have a heightened level of illegal traffic
into the United States: 300,000 people crossing the border in December,
and millions who have crossed under this President. We are now, in the
middle of that crisis, going to continue to fuel the fire.
I think that is a mistake. I think it is a mistake for the country. I
think it is a mistake on policy. I think it is a mistake politically.
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1 minute to the gentleman
from Nebraska (Mr. Smith).
Mr. SMITH of Nebraska. Mr. Speaker, I rise today in support of this
tax bill.
I am particularly pleased this bill includes language that I
introduced to ensure capital-intensive industries can fully deduct the
cost of interest from their taxes. This is particularly important right
now as Americans continue to deal with recent high inflation and higher
interest rates.
Alongside provisions ensuring domestic research and development in
small business capital expenses are fully deductible, this bill
enhances the opportunity to develop new products in America, create
jobs, making those products here, and then sell those products around
the world.
I am also glad this bill includes language ensuring Americans living,
working, and investing in companies within our ally, Taiwan, do not
face double taxation.
Also, I especially appreciate that the language of the Tax Cuts and
Jobs Act applying to the child tax credit is continued in this bill.
Mr. Speaker, this is a strong bill. It deserves strong bipartisan
support. I look forward to voting for it. I urge my colleagues to do
the same.
Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that
debate on the pending motion be extended by 20 minutes, to be
controlled by the gentleman from Massachusetts (Mr. Neal).
Mr. GAETZ. Mr. Speaker, I object.
[[Page H352]]
The SPEAKER pro tempore. Objection is heard.
Mr. ROY. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Gaetz).
{time} 1715
Mr. ROY. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Gaetz).
Mr. GAETZ. To the extent that this is a tax bill, there are good
provisions in it on business expensing for economic growth.
Nonetheless, Mr. Speaker, this is not a tax bill. This is a welfare
bill masquerading as a tax bill. The Wall Street Journal was correct to
identify the ways in which this legislation vastly expands the welfare
state.
This is how the bipartisan agreement came together: If the
Republicans were willing to give the Democrats what they wanted for
illegal aliens to get massive subsidies and welfare, then the Democrats
were willing to give the Republicans what they wanted on a bunch of
business welfare.
The child tax credit, as currently contemplated, will be a massive
pull factor to bring people into this country illegally, and we could
have, as the majority party, demanded constraints to stop them from
being able to use the money that way. Nevertheless, bipartisanship was
more important than good policy.
As my friend from Kentucky (Mr. Massie) noted recently, Mr. Speaker,
if you aren't paying taxes and you get a refundable tax credit in the
form of a check, that is not a tax cut. That is not even tax policy.
That is just welfare. That is just giving people money who didn't
initially pay it in, and a bunch of them are here illegally.
It is not just a welfare bill in that respect. It is also corporate
welfare. Indeed, these tax credits they have put in there are so
targeted, they are bought and paid for by the lobbyists who fund their
campaigns and give them donations, and it is entirely wrong. We should
have a flat tax code.
The R&D tax credits they are putting in are deeply misguided. They
continue to distort the economy, and, frankly, it is just another
flavor of a lot of the Green New Deal tax credits that you act like you
are against, but, indeed, Mr. Speaker, that is not the case.
This is not a tax bill. It is a welfare bill in drag, and that may be
appealing to some of the proponents.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentleman from Massachusetts (Mr. Neal), who is the ranking member of
the Ways and Means Committee.
Mr. NEAL. Mr. Speaker, this is not the bill I would have written, but
this is sensible policy. There is no denying the fact that, despite
what the two previous speakers have said, 16 million children will
benefit immediately from the expansion of the child tax credit.
This is not welfare. Addressing childhood poverty in America ought to
be a priority for us every single day. Low-income housing tax credit is
sound policy. Our economy grew 3.1 percent last year thanks, in some
measure, to Joe Biden's economic policies.
I can't believe that we would sit here tonight and hear that
addressing childhood poverty is welfare. The number of children in
America who live outside of the mainstream because of concerns that
they did not create tells much of the whole story.
This is a bipartisan piece of legislation. It is not perfection. It
is not what I would have written, but this is a decent tax package to
go forward.
Mr. ROY. Mr. Speaker, I yield 1 minute to the gentleman Texas (Mr.
Doggett).
Mr. DOGGETT. Mr. Speaker, this corporate tax windfall bill, thinly
disguised as help for children, offers even more tax advantages to
corporations that are paying today a mere 7.8 percent tax rate.
A working mother of two earning the average wage pays a Federal
effective rate of 20 percent. Even The Wall Street Journal called one
provision in this bill a retroactive sop. It is minimal help for
children and maximum benefits for those who are failing to pay their
fair share. For every $1 that goes to children under this bill, $5 goes
to corporations.
Republicans are enabled to lock in $600 billion in extended Trump tax
breaks while millions of children are left in preventable poverty and
are denied a full tax credit. While bipartisan, this bill is no more
equitable than our broken bipartisan tax code overflowing with
loopholes and special advantages for the well-connected.
This deal only continues slanting our tax system against working
families. Reject the unjustified corporate ransom and lock in genuine
relief for children.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to gentleman
from Illinois (Mr. LaHood).
Mr. LaHOOD. Mr. Speaker, I thank Chairman Smith for negotiating this
good, monumental tax bill.
I particularly want to highlight the inclusion of two affordable
housing provisions in the bill. They are provisions that stem from my
bill, the Affordable Housing Credit Improvement Act, which has garnered
the support of 212 cosponsors in the House equally divided between
Republicans and Democrats.
We are facing an affordable housing crisis in this country, and
strengthening the low-income housing tax credit, LIHTC, established by
Ronald Reagan is key in this and will be very successful to bridging
the gap to more affordable housing in this country.
Mr. Speaker, I urge a ``yes'' vote on this very good tax bill.
Mr. ROY. Mr. Speaker, I yield such time as he may consume to the
gentleman from Kentucky (Mr. Massie).
Mr. MASSIE. Mr. Speaker, I thank the gentleman from Texas for
yielding.
Mr. Speaker, there is something in this bill called tax credits, but
they are also called refundable.
So what is a refundable tax credit?
It is welfare by a different name.
We are going to give cash payments--checks--to people who don't even
pay taxes. The hardworking constituents whom I represent in Kentucky
are tired of getting up at 6:00 a.m., driving an hour or two to work
and working their hind ends off to watch their neighbors collect these
checks of which there will be more of after this bill. It is just
wrong.
Now, does anybody find it interesting that the Democratic leadership
has not even claimed time in opposition to this bill?
Why is that?
Why aren't they opposed?
Now, there are a few Democrats opposed. Maybe some don't think it
goes far enough, or some are opposed to what they call corporate
welfare in here, but, by and large, the Democrats are not opposed to
this because this is an expansion of the welfare state. That is what it
is.
So here is my concern about that: Is it mean to give away money?
No. It is not mean. We could consider it compassionate until you
think about the implications.
Now, they say this tax bill is paid for.
What does that mean?
What does it mean when it is paid for?
There are some gimmicks in here that are not going to reduce the
debt. This is actually going to cost. Now, by Washington, D.C., math,
it is paid for. Nonetheless, Mr. Speaker, when you look at the national
debt, it will go up as a result of this bill. Everybody in here knows
it. We know these are gimmicks when you call it a pay-for. This bill
will increase our debt.
What is that going to do?
It is going to cause inflation to go up. That is going to affect
everybody, including the people you are trying to give the money to for
having kids.
This is bad policy. I am opposed to it, and I urge a ``no'' vote.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentlewoman from Washington (Ms. DelBene).
Ms. DelBENE. Mr. Speaker, the tax bill we are considering today
contains several wins for families and our economy, but one piece falls
short. The child tax credit expansion would still leave behind millions
of kids in families that need it the most.
Democrats offered a solution proven to cut child poverty in half, but
Republicans rejected it. I will still continue leading the effort to
fully expand the child tax credit, invest in our children, and lift up
families.
While today's bill is imperfect, it does include policies I have
championed, including the largest expansion of the low-income housing
tax credit in several decades and policies to reduce double taxation on
American and Taiwanese businesses and workers.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. ROY. Mr. Speaker, may I inquire how much time is remaining.
[[Page H353]]
The SPEAKER pro tempore. The gentleman from Texas has 12 minutes
remaining.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Arizona (Mr. Schweikert).
Mr. SCHWEIKERT. Mr. Speaker, this is sort of elementary school
economics. A dozen things have been said here that are absolutely
wrong.
Mr. Speaker, if you look at the 2017 tax reform, where did we get the
greatest economic boost with the least amount of cost?
It was actually the R&D and the expensing. We actually have models
that make it perfectly clear the expensing actually was the one portion
of the tax reform that actually paid for itself. That is because in a
higher interest rate world--and I believe higher interest rates came
from Democrat spending, but that is a different discussion--the fact of
the matter is that if you do research and development then you have to
finance it. This is where you get the economic growth that actually
knocks down inflation and makes our society more prosperous. It is a
good bill.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from California (Mr. Thompson).
Mr. THOMPSON of California. Mr. Chairman, I agree with my Democratic
colleagues that the child tax credit portion of this bill should be
stronger. Be that as it may, in a divided government, you don't always
get exactly what you want, and this bill is an improvement over the
status quo.
I am especially pleased at the inclusion of my legislation providing
critical relief to wildfire survivors which passed the Ways and Means
Committee unanimously.
Mr. Speaker, I urge my colleagues to pass this bill.
Mr. SMITH of Missouri. Mr. Speaker, I reserve the balance of my time.
Mr. ROY. Mr. Speaker, I yield 1 minute to the gentlewoman from
California (Ms. Sanchez).
Ms. SANCHEZ. Mr. Speaker, I always support good-faith efforts to
improve our Nation's tax code.
I don't oppose reasonable benefits for the American businesses that
drive economic growth and strength. However, I can't support a bill
that provides generous tax breaks to large corporations while offering
only minimal tax relief for working families.
Republicans have refused again and again to enact Democratic tax
writers' proposals that would enact a more generous version of the
poverty-busting child tax credit.
Under President Biden's American Rescue Plan, the child tax credit
lifted millions of kids out of poverty and helped their families buy
groceries, pay for healthcare, and cover their rent.
As a mother and a legislator, I will never stop fighting on behalf of
our country's poorest babies and children and the moms, dads,
grandparents, and other caregivers who raise them.
Unfortunately, I have to vote against this tax scheme because I, for
one, recognize that working families matter, or should matter, just as
much as businesses.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1 minute to the gentleman
from Georgia (Mr. Ferguson).
Mr. FERGUSON. Mr. Speaker, I rise today in support of this piece of
legislation. I do not worry one single bit about making sure that
American business is more competitive on the global stage. Making sure
that our businesses are competitive through research and development
and then having the capital to turn those ideas into a product and then
turn those products into jobs here in America is something that we
should be doing.
Staying competitive against our adversaries on the global stage is
something that we should be doing.
This is not about giving businesses a tax break. This is about
investing in America and American jobs.
Moreover, the complete mischaracterization about the child tax credit
is the most intellectually dishonest conversation that I have heard on
this floor in a very long time.
This is about making sure that people who work and their families
have the ability to get ahead.
Let me tell you something, Mr. Speaker, we all believe on this side
of the aisle that you should work in order to receive Federal benefits.
That is something that this bill does, and I think it is important.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. SMITH of Missouri. Mr. Speaker, I yield an additional 15 seconds
to the gentleman from Georgia.
Mr. FERGUSON. Mr. Speaker, the gentleman from Florida just
characterized the child tax credit piece of this bill, which is
something that President Trump signed into law, as giving people who
are here illegally a check. I hate to see that mischaracterization from
my colleague from Florida about President Trump's signature bill.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Connecticut (Mr. Larson).
Mr. LARSON of Connecticut. Mr. Speaker, I rise in strong support of
this bill. I especially want to commend my colleague, Ron Estes, for
working directly on this R&D tax credit.
Mr. Speaker, what you are hearing today on this floor is what happens
when we work and pull together. We are in a race with China, and we had
better be well aware of what we have to do with R&D, because that is
critical to it.
I also commend Rosa DeLauro, whom you will hear from as well, Mr.
Speaker. I thank Dr. Ferguson for what he has to say just about the
child tax credit and how important that is. Children need to be
protected.
Mr. ROY. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Gaetz).
Mr. GAETZ. Mr. Speaker, if my characterization of the child tax
credit is intellectually dishonest, then I would love to hear the
warrant behind that claim because none of my colleagues can state how a
huge sum of this money is not going to end up in the hands of illegal
immigrants.
When it comes to evaluating that context in the era of Trump versus
the era of Biden, it is somewhat embarrassing that I would have to
remind a Republican colleague that it is the Biden administration that
has let in 10 million additional people which vastly blows out the cost
of this particular endeavor.
Under Trump, we didn't have an open border, so there was less of a
concern about drawing more people here illegally to this child tax
credit.
{time} 1730
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentlewoman from Texas (Ms. Van Duyne).
Ms. VAN DUYNE. Mr. Speaker, I rise in support of the Tax Relief for
American Families Act. This is actually paid for. It will extend the
Trump-era tax cuts that brought us record employment, economic growth,
and wages that grew at a rate nearly 5 percent higher than inflation.
If we do not make these important reforms to our tax code, my home
State of Texas will lose more than 8,000 jobs and nearly $700 million
in wages.
Importantly, this bill will maintain Trump-era safeguards in work
requirements to the child tax credit to ensure that it only goes to
American citizens, making it one of the few tax credits to actually
have the strong requirement for block claims from illegal immigrants
and noncitizens.
Mr. Speaker, I stand with north Texas families.
Mr. ROY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the truth is, illegal immigrants are eligible for the
CTC expansion because they can get an individual taxpayer
identification number in lieu of a Social Security number.
In fact, in the USA Today, somebody who is a proponent of this
actually opined and wrote in the USA Today, ``How the Child Tax Credit
Could Lift Undocumented Immigrants out of Poverty.''
That is just the truth. It is what we actually did in 2017. I don't
care if my colleagues on this side of the aisle think that is a good
idea. I don't care if they are willing to weigh that against what they
believe is good for the corporate changes to the law, but don't try to
snow the American people. That is what we are doing.
But my colleagues on this side of the aisle will thump their chest
about being so great on the border, and yet,
[[Page H354]]
the border is wide open. There was still 300,000 pouring across in
December.
Oh, what have we done? We had some votes, but we are still funding
it. Here, we are not just funding it, we are juicing it. We are
actually encouraging it. We are supplementing it. We are saying: Come
on over here, have children, and get a tax credit.
How is that a policy that the American people want to support?
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Mr. Speaker, I thank the gentleman for yielding.
Mr. Speaker, listening on the floor of the House, there are arguments
that are legitimate in terms of the shortcomings of this. It is not
perfect, but I don't want the perfect to be the enemy of the good. I
don't want to deny 16 million children an opportunity for this Federal
support in order to make a point.
I hope we will come to the point we are able to deal with tax policy
in a more rational fashion. Under Chairman Neal, I think we will, but
in the meantime, it is important to pass this legislation to meet the
needs of American families.
Mr. ROY. Mr. Speaker, I yield such time as he may consume to the
gentleman from Pennsylvania (Mr. Perry).
Mr. PERRY. Mr. Speaker, I applaud my colleagues on our side of the
aisle for working hard to try and return some of the money to
hardworking people. I am always for that. If you are working, you
should keep the money that you earn. Whether you are corporate or
whether you are an individual, but here is where I have a problem--this
refundable tax credit.
See, my folks get up every day. They get up early. It is usually
dark. They put their kids on the schoolbus and they go to work to
afford their bills, which they can barely afford right now. They can't
afford their groceries, their gasoline, their credit card bills. They
can't afford them because the Federal Government is flooding the
economy with money.
Now, we are getting ready to flood more because, Mr. Speaker,
regardless of what anybody thinks, if you are here illegally with a
Social Security number, you are going to get the money.
I have a news flash for you: Little kids don't get the checks sent to
them, even though they got a Social Security number, but their parents,
who are here illegally, do, and it is going to happen by the millions.
My folks, the folks that are working hard to put food on their table,
are tired of paying for that. We should reject this.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Kansas (Mr. Estes), who has led the legislation on
research and development.
Mr. ESTES. Mr. Speaker, I thank Chairman Smith for his tireless work
on this tax package that we are about to pass. American families and
small businesses are in desperate need of economic relief. High costs
of goods and services and burdensome regulations have strained
pocketbooks and the economy, and Americans need a break.
The Tax Relief for American Families and Workers Act provides the win
we need. This bill includes a provision that I have been advocating
for--the immediate R&D expensing. Without this, we have seen the growth
rate of R&D spending slow, and since three-quarters of R&D spending is
on wages and salaries, R&D amortization is primarily a jobs issue.
Countless Kansas small businesses expressed their grave concern about
this expired provision. I am glad we are taking a positive step to
restore immediate R&D expenses.
Mr. ROY. Mr. Speaker, I yield 1 minute to the gentlewoman from
Wisconsin (Ms. Moore).
Ms. MOORE of Wisconsin. Mr. Speaker, do you all remember when our
good friend, Mitt Romney, talked about the 47 percent of the takers?
This bill locks in the principle that we have takers and makers. We
have $600 billion of permanent tax cuts to the wealthiest people, and
yet some woman who gets up in a rural area and marches off to the
grocery store and works 30 hours a week won't see a dime of this tax
credit because she is too poor. She is a taker; she is not a maker.
You know, I think it is all right. This is a compromised bill. It is
better than current law where that same minimum wage worker would have
to work 70 hours a week in order to get this tax credit now only has to
work 40 hours a week, plus do a little Uber on the side to get the tax
credit.
So I think we need to compromise, but we don't need to capitulate. We
are not going to expand this tax credit for poor children, but the
poorest will be even poorer.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Pennsylvania (Mr. Smucker).
Mr. SMUCKER. Mr. Speaker, the Tax Cuts and Jobs Act worked. It grew
the economy. It increased revenue and it helped every American family
to achieve a better life. It also, for those in opposition to this
bill, for the first time, required a Social Security number for the
child in order for a family to receive the child tax credit.
Many who are in opposition to this bill today voted for the Tax Cuts
and Jobs Act. Are you telling me you regret that vote? This continues
the provision to require children to have a Social Security number for
the family to benefit from the child tax credit.
Mr. ROY. Mr. Speaker, may I inquire as to the time remaining.
The SPEAKER pro tempore. The gentleman from Texas has 6 minutes
remaining.
Mr. ROY. Mr. Speaker, I yield 2 minutes to the gentleman from
Virginia (Mr. Good).
Mr. GOOD of Virginia. Mr. Speaker, I thank the gentleman from Texas
for yielding me the time. I appreciate it.
Mr. Speaker, here we are again where the minority party isn't even
using their time to oppose the bill put forward by the majority.
Just 2 weeks ago, the last major piece of legislation that we passed
by suspension of the rules, the Democrat minority party voted for it
207-2. It will be interesting tonight to see how many Democrats vote
for this and how many Republicans vote for it.
I am against this because of the suspension of the rules, the process
that we are using. I am against it because the expansion of the welfare
state. I am against it because we are not correcting the fact that
illegals can have access to the child tax credit.
I have never done this on the House floor before, but I am going to
read what someone else wrote about this bill.
This is from Kevin Roberts with Heritage Foundation. I commend them
for what they said: ``Although, the bill claims that its aim is to
provide `tax relief' to families with children, it contains very little
relief for working families. Instead, nearly 91.5 percent of the
`family benefits' in this bill are cash welfare payments to families
who pay no Federal income taxes.
. . . the bill provides $30.6 billion in new welfare cash payments.
If these new cash welfare benefits were extended over 10 years (which
is very likely) the total cost would exceed $140 billion.''
The Ways and Means bill moves toward fulfilling President Biden's
aims. The bill embraces the premise and goals of Biden's plan to
greatly increase cash welfare payments, predominantly for single
parents while weakening the already poorest work requirements.
This bill obviously sets the ground for a future compromise that
would fully enact the Biden child allowance program. Overall, this
portion of the Ways and Means bill represents an enormous political
victory for President Biden.
Under current law, illegal aliens who have children that were born in
the U.S., and many do, can claim welfare payments from the additional
child tax credit. The Ways and Means bill expands these welfare
payments for millions of people who are in the U.S. illegally and for
millions more entering in the future. The bill weakens welfare work
requirements and continues a longstanding push by Congress to dress up
welfare benefits as tax relief.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Illinois (Mr. Davis).
Mr. DAVIS of Illinois. Mr. Speaker, I have been told that a half a
loaf is better than none, but this isn't even a half a loaf, but I am
going to vote for it because our families and businesses need
[[Page H355]]
help. While it does help, it does not create a 50 percent reduction in
child poverty as we did in 2021. It is more like a deal than a bill,
but I am going to vote for it.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1 minute to the gentleman
from Oklahoma (Mr. Hern).
Mr. HERN. Mr. Speaker, as a result of President Trump's tax reform,
our economy was strong, wages were up, unemployment was at all-time
lows. We have a critical tax cliff fast approaching at the end of
2025--just 20 months from now--with the majority of President Trump's
progrowth policies expiring.
Extending these expired provisions is not just an economic issue, one
could argue this is a national security issue.
Mr. Speaker, we can't expect to compete with China when it is more
expensive to invest, innovate, and grow here in the United States. I
urge all of my colleagues to support this bill, which extends President
Trump's progrowth policy agenda and increases U.S. competitiveness and
resilience against China's economic influence.
Mr. ROY. Mr. Speaker, I yield 1 minute to the gentlewoman from
Connecticut (Ms. DeLauro), the ranking member of the Appropriations
Committee.
Ms. DeLAURO. Mr. Speaker, I cannot vote for a deal that so lopsidedly
benefits big corporations while failing to ensure a substantial tax cut
to middle- and working-class families.
The deal is inequitable at a time when we have seen the greatest rise
in inequality. Big corporations made super profits at the expense of
the consumer. It is a mockery of who representative government works
for: massive tax cuts for the biggest corporations, while denying
middle-class families the economic security they had under the
expanded, monthly child tax credit.
Let us be unequivocal. This is a reversal of the largest middle-class
tax cut in history. This bill provides billions of dollars in tax
relief for the wealthy, pennies for the poor.
The biggest corporations, who have paid no Federal income tax, are
the beneficiaries of this deal. Big corporations are richer than ever.
This is no even split.
Families today live paycheck to paycheck, not seeing their wages keep
up with rising costs. The economy is not working for them. The bill
fails to improve the child tax credit, leaving millions of middle-class
families without the tax cut they received in 2021. It keeps millions
of children in preventable poverty while giving the biggest tax breaks
to the biggest corporations.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentlewoman from West Virginia (Mrs. Miller).
Mrs. MILLER of West Virginia. Mr. Speaker, I commend Chairman Smith
for his diligent work. It is a huge win for working families, small
businesses, and employers throughout our country. This has set the tone
for the Ways and Means' agenda where we are able to make the best
package possible.
The child tax credit expansion will help working families, while
protecting the important guardrails that we fought so hard to ensure
that the program is going to help Americans in need.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentlewoman from Alabama (Ms. Sewell).
Ms. SEWELL. Mr. Speaker, Democrats today will make good on a promise
to deliver tax relief for American families.
This bill expands the child tax credit for 16 million children,
including 280,000 children in Alabama.
The tax credit is one of the most effective antipoverty programs in
the country and will, again, provide much-needed assistance to families
throughout Alabama.
This bill will also provide much-needed disaster tax relief to the
families of the Black Belt, Dallas County, Hale County, Greene County,
and Sumter County that fight to rebuild in the wake of last year's
tornado.
Mr. Speaker, I ask my colleagues to support this measure.
{time} 1745
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Florida (Mr. Steube), the author of the disaster tax
language.
Mr. STEUBE. Mr. Speaker, in September 2022, my district in southwest
Florida was devastated by Hurricane Ian. Totaling over $112 billion in
damages, Ian was the third costliest hurricane in American history and
the most expensive ever to hit Florida. Over a year later, my
constituents are still working toward rebuilding their lives.
I introduced the Federal Disaster Tax Relief Act, which is included
in this bill, to deliver relief for American families in 45 States who
were victims of federally declared disasters. This includes victims of
wildfires, chemical spills, and hurricanes that have affected millions
of Americans over the past several years.
Mr. Speaker, we should pass this important tax relief for victims of
natural disasters. I urge my colleagues to support this legislation.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Virginia (Mr. Beyer).
Mr. BEYER. Mr. Speaker, this bill is not perfect, but no bill ever
is. This act is win-win-win. There will be 400,000 children who will be
lifted out of poverty. There will be 200,000 new affordable homes
built. Research and development, the absolute essential investment for
economic prosperity, will be incentivized again.
Politics is the art of the possible. In a divided Congress, this is
the best we can accomplish. I urge a ``yes'' vote.
Mr. ROY. Mr. Speaker, The Wall Street Journal editorial last week
said about this bill:
``Up to $1,600 of the $2,000 credit is refundable, and the bipartisan
bill would make $2,000 refundable by 2025.'' Now, in fairness, ``A
$1,400 limit was tethered to inflation under the 2017 GOP tax law and
is thus increasing over time anyway.''
The general point here is: ``But at least admit this is income
redistribution, not `tax relief'. . . . '' It is income redistribution.
``Worse, the deal undermines the incentive to work in return for the
credit. The current credit at least requires a small amount of income--
a mere $2,500--to begin to claim it. That means it gives low-income
Americans an incentive to work more to earn more, which is good for
them and their children.''
However, this would allow parents to ``rely on the prior year's
income to trigger the credit for 2024 and 2025. Work one year--and earn
benefits for two. The practical effect is to `cut the work requirement
in half,' '' according to a report by the American Enterprise
Institute.
The fact is the editorial closes: ``The business lobby wants the tax
breaks.'' By the way, this is The Wall Street Journal editorial. ``The
business lobby wants the tax breaks, and some Democrats in Congress
want them as well. But those policies ought to stand or fall on their
merits, not on a political trade that will do more harm than good.''
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, this legislation strengthens our
workforce.
There is a report from experts at the Joint Committee on Taxation
which confirms that the child tax credit changes will have a net
positive effect on jobs and workforce participation can be found in the
following location: https://www.jct.gov/getattachment/dce63c47-9b1d-
4f10-8a55-2471681f7685/x-6-24.pdf
Mr. Speaker, I yield 30 seconds to the gentleman from Utah (Mr.
Moore).
Mr. MOORE of Utah. Mr. Speaker, I rise in strong support of the Tax
Relief for American Families and Workers Act of 2024.
Not a lot of legislation actually affects every single American.
Today, we get a chance to actually pass a piece that does. Folks back
home hear a lot of the drama that we do, and they hear what gets put in
the headlines, but never have I seen neighbors of mine, literally
coaches that I coach with say: Look, this is a killer for my small
business. Losing the R&D tax credit has destroyed my ability to grow my
small business.
[[Page H356]]
This affects every single American and will be one of the most
productive, positive, progrowth tax policies that this Congress and
Congresses to come will do.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Pennsylvania (Mr. Evans).
Mr. EVANS. Mr. Speaker, I rise to discuss an underappreciated part of
this bill, improvements to the low-income housing tax credit. This is
urgently needed. Millions of American families struggle to pay their
rent or buy a house. We must do more.
This bill is one step toward eliminating housing insecurity in
America. I urge my colleagues to support it. We must make sure that no
child goes without a roof over their head in this country. I will
continue to work to make that a reality.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Iowa (Mr. Feenstra).
Mr. FEENSTRA. Mr. Speaker, agriculture is the economic engine of my
district, and our tax policies must help our farmers grow, invest, and
compete with China. This legislation does exactly that.
Our farmers will benefit from two key provisions in this bill: 100
percent bonus appreciation and the expansion of the section 179
deduction limit. Our producers rely on these tools to buy farm
equipment and invest in their operations.
This legislation is a victory for our farmers and rural communities.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Illinois (Mr. Schneider).
Mr. SCHNEIDER. Mr. Speaker, today I rise in support of this truly
meaningful bipartisan legislation that will benefit millions of needy
children.
This bipartisan bill is the most significant, if not the only
significant legislation passed so far this Congress, helping lift kids
out of poverty, lowering the tax burden for working families,
supporting innovative businesses, and expanding the supply of
affordable housing.
Mr. Speaker, despite the exotic arguments those opposed to this bill
tonight are trying to make, these are things we should all be proud of.
I urge my colleagues to support this bill.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1 minute to the
gentlewoman from New York (Ms. Malliotakis).
Ms. MALLIOTAKIS. Mr. Speaker, I thank Chairman Smith and the entire
committee for their hard work on this. Trump's tax cuts created jobs,
lifted wages, led to 50-year low unemployment, and lifted millions from
poverty.
Today, we are building on that success with projobs, progrowth,
profamily policies by extending these priorities and increasing the
child tax credit as well, but we are also helping build affordable
housing by expanding Reagan's initiatives, and we are enabling
Taiwanese investment in semiconductor manufacturing here in the United
States to further create jobs, enhance our supply chain, and reduce
dependency on China.
We still have so much work to do. Over the next 2 years, there will
be more tax policies coming out of this House. I hope we will be able
to increase the standard deduction; that we will be able to provide
SALT--State and local tax--relief; and exempt more Social Security
income from taxation to help our seniors, who have not seen that change
in four decades.
Mr. Speaker, I thank everyone on this committee who worked so hard in
a bipartisan manner to get this done. I look forward to seeing it pass
in both Houses.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from California (Mr. Panetta).
Mr. PANETTA. Mr. Speaker, this is a good bill. It includes tax
credits for childcare, immediate expensing for small business R&D, tax-
free settlement for natural disasters and, yes, more affordable
housing. This is a good bill, not just for my district, but for our
country and our country's faith in Congress' ability to actually affect
the lives and livelihoods of all Americans.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent to
include in the Record a letter signed by a dozen pro-life
organizations, including Concerned Women for America, Susan B. Anthony
Pro-Life America, and the Eagle Forum in support of this legislation
and its important profamily and prowork provisions.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
January 29, 2024.
Hon. Mike Johnson,
Speaker, House of Representatives,
Washington, DC.
Hon. Charles Schumer,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Hakeem Jeffries,
Minority Leader, House of Representatives,
Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate,
Washington, DC.
Dear Speaker Johnson, Minority Leader Jeffries, Majority
Leader Schumer, and Minority Leader McConnell: As pro-life
organizations, we support making sure mothers, fathers and
their children have every tool and resource available to
choose life and support families. American families face
unprecedented challenges with higher costs of the most
essential items for families such as food, gas, energy,
health care, and housing. We write to you in support of an
opportunity to advance a pro-family, pro-parent tax package
that recognizes the unique challenges facing American parents
today.
The Tax Relief for American Families and Workers Act (H.R.
7024) would enhance the Child Tax Credit (CTC) to financially
bolster families, promote life, and support growing families.
This is especially critical during this time of devastating
inflation and paralyzing economic uncertainty.
H.R. 7024 improves the CTC to better serve all families in
need by adjusting the CTC for inflation so that they receive
tax relief. This means as the costs of having a family
increase, so will the resources moms and dads have to make
ends meet and provide for their kids.
The legislation would also stop penalizing parents for
having more than one child by treating all children equally.
This is not only fair for families no matter their size but
also ensures support for growing families. The bill also
promotes economic growth by strengthening incentives to work
by reducing families' marginal rate by 15 percentage points
per child for parents with earned income.
H.R. 7024 provides commonsense protection for families and
supports growing families at a time when the cost of raising
children continues to increase. If Congress does not act to
pass H.R. 7024 now, the CTC will continue to discriminate
against and financially penalize growing families. Congress
has the opportunity within a limited window of time to enact
a pro-family, pro-life tax policy that will provide immediate
benefit to families in need.
We are grateful for your strong leadership to promote and
protect American families and we urge you to resolve any
outstanding differences and then support the enhanced CTC in
the Tax Relief for American Families and Workers Act to
support families who are struggling today while encouraging
families to grow for tomorrow.
Sincerely,
Penny Nance, CEO and President, Concerned Women for America
LAC; Marjorie Dannenfelser, President, Susan B. Anthony Pro-
Life America; Walter Kim, President, National Association of
Evangelicals; Gary L. Bauer, President, American Values; Joel
Grewe, Executive Director, HSLDA Action; Kelsey Hazzard,
Board President, Secular Pro-Life; Kristen A. Ullman,
President, Eagle Forum; F. Brent Leatherwood, President,
Ethics & Religious Liberty Commission of the Southern Baptist
Convention; Steven H. Aden, Chief Legal Officer & General
Counsel, Americans United For Life; Dave Donaldson, Co-
founder & CEO, CityServe International; Robert P. George,
McCormick Professor of Jurisprudence, Princeton University;
Eric Metaxas, Host, The Eric Metaxas Show and Socrates in the
City.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Pennsylvania (Mr. Fitzpatrick).
Mr. FITZPATRICK. Mr. Speaker, Americans across the Nation will
benefit from this progrowth, pro-America, bipartisan tax bill.
The research and development provision will boost innovation here at
home, making our Nation much more competitive against China. Enhanced
small business expensing will allow our community businesses to thrive
and prosper. Finally, more than 500,000 children in my home State of
Pennsylvania will benefit from the expanded child tax credit.
Mr. Chairman, I commend Chairman Smith and Ranking Member Neal for
working together to advance policies for all Americans.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
[[Page H357]]
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentlewoman from New York (Ms. Tenney).
Ms. TENNEY. Mr. Speaker, as a small business owner for a long time in
upstate New York, I join my colleagues today in supporting H.R. 7024,
the Tax Relief for American Families and Workers Act.
This comprehensive package was shaped by critical feedback that we
received from everyday Americans across this Nation through field
hearings conducted by the Ways and Means Committee. H.R. 7024 will have
a meaningful impact on my constituents in upstate New York, way up in
New York's 24th District, from hardworking families to manufacturers to
multigenerational family farms, and the largest agricultural district
in the Northeast. This package will have wide-ranging benefits for so
many Americans.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 30 seconds to the
gentleman from Massachusetts (Mr. Neal).
Mr. NEAL. Mr. Speaker, we have heard the arguments here. This is what
is possible. Despite what some have said here, this does expand the
child tax credit. It is clear.
No legislation that comes to this floor is perfect. We tried very
hard, and we succeeded on the Democratic side in improving this
legislation.
What is in front of us tonight is pretty simple: 16 million children
will benefit from the improvement to the child tax credit. That is a
fact.
Mr. ROY. Mr. Speaker, may I inquire how much time remains.
The SPEAKER pro tempore. The gentleman from Texas has 1\3/4\ minutes
remaining.
Mr. ROY. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I am prepared to close, and I
reserve the balance of my time.
Mr. ROY. Mr. Speaker, I reiterate my appreciation to my friend, the
chairman, and all those who worked on this bill in the Ways and Means
Committee.
There are a lot of good provisions in this bill, many of which I
support. There are good provisions in there to help economic growth--
the expensing provisions, interest, R&D--but I have serious
reservations. The fact of the matter is for all those watching at home,
to my constituents, this bill does not fix the problem that allows
illegal aliens who have children who were born in the United States to
claim the tax credit. It takes the problem we have with so-called
birthright citizenship and anchor babies and doubles down on it, makes
it worse. That was a mistake in 2017. We should rectify that mistake.
However, worse, it goes on and expands the credit.
Mr. Speaker, 91\1/2\ percent of the relief in this bill are cash
welfare payments to families that pay no Federal income taxes. It
provides a total of just $2.8 billion to working families that pay
taxes over 3 years. The fact is, the credit does expand, and it gets to
be refundable to the full tune of $2,000 by 2025.
These provisions undermine the benefits that we are trying to provide
for economic growth which, I might add, are only a 2-year extension. It
puts all of this in one big basket in 2025, taking away any leverage we
are going to have by giving the other side what they want on the child
tax credit.
The fact of the matter is, we should not be supporting this bill. We
should be doing what we said we would do when we got into power: We
should secure the border of the United States, we should cut spending,
and we should honor what we campaigned on in this body.
Mr. Speaker, I yield back the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I confirm for my colleagues that
this bill preserves existing safeguards of the child tax credit and
does not open the door for illegal immigrants to claim the credit. No
other tax credit or deduction can match the child tax credit's
protections from improper claims combined with safeguards against
payments to non-U.S. citizens.
Mr. Speaker, this is a win for millions of small businesses, a win
for millions of working families. This is a win for America. I urge the
body to support this great piece of legislation, and I yield back the
balance of my time.
Mr. PASCRELL. Mr. Speaker, the enhanced Child Tax Credit enacted by
Democrats in 2021 slashed childhood poverty in half. I repeat: in half.
It is not hyperbole to call it one of the most successful policies ever
passed by this Congress. And it is a tragedy its extension was blocked
by the other side.
Restoring some of our policy, as this bill does, will be a lifeline
for millions of families. And that is vital progress. I do not love
every element in this package. In committee, Republicans unanimously
voted to defeat my amendment to add real SALT relief for middle class
families.
But this is a start, and we will keep pushing to bring back the full
enhanced Child Tax Credit and enshrine it for good.
Mrs. GONZALEZ-COLON. Mr. Speaker, I join in support of H.R. 7024, the
Tax Relief for American Families and Workers Act, being considered in
the House today. This bipartisan bill, championed by House Ways and
Means Committee Chairman Jason Smith and Senate Finance Chairman Ron
Wyden, improves existing pro-growth tax policies to support America's
families, strengthen our economy, and boost innovation by helping U.S.
companies compete against China.
One of the main provisions in this bill is the Child Tax Credit,
which benefits more than 250,000 families in Puerto Rico. A study made
by the Youth Development Institute (Instituto del Desarrollo de la
Juventud), a non-profit organization focused in reducing child poverty
on the island, found, youth poverty may have declined from 55 to 39
percent in 2021 when eligibility for the Child Tax Credit was expanded
to residents of Puerto Rico with one or two qualifying children.
Previously this tax benefit only applied to three or more qualifying
children. I am proud that my legislation recognizing the need to
include families with one or two children was adopted, and families can
claim this credit in the same manner as families in the rest of the
country.
From hurricanes to earthquakes. Puerto Rico has suffered several
natural disasters over the last few years. The support we have received
from Congress and federal agencies has been instrumental in our
recovery. As such, I sympathize with my colleagues who have been
afflicted by recent disasters and support the tax provisions that are
presented on this bill that would bring much needed relief to
communities across the country.
I am encouraged by the bipartisan and bicameral work that produced
this bill, and I strongly encourage my colleagues on the House and Ways
and Means Committee and Senate Finance Committee to continue working on
expired tax provisions, including the Rum Excise Tax Cover-Over.
Earlier this Congress, I reintroduced H.R. 3146, bipartisan and
bicameral legislation that would modify the amount of money transferred
to Puerto Rico and the U.S. Virgin Islands from the excise taxes
collected on rum that is produced in or imported into the rest of the
United States, known as ``rum cover-over.'' It is used to support
critical services such as healthcare and education, as well as
agricultural and conservation efforts.
I was proud when Congress last approved my bill to extend the rum
cover over for five years as part of the Bipartisan Budget Act of 2018.
However, that increased rate of the rum cover over expired at the end
of December 2021 and has yet to be renewed, resulting in continued
uncertainty, and negatively impacting the economies of both
jurisdictions.
Puerto Rico's rum industry is one of the major drivers of the
island's economy, producing more than 70 percent of the rum that is
consumed in the U.S. and 80 percent of the rum consumed around the
world.
With that in mind is that Congress created the rum cover over program
in 1917 and has continued to be part of tax extenders legislation
since. I encourage my colleagues to include my bill in any forthcoming
tax legislation,
The SPEAKER pro tempore. All time for debate has expired. The
question is on the motion offered by the gentleman from Missouri (Mr.
Smith) that the House suspend the rules and pass the bill, H.R. 7024,
as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ROY. Mr. Speaker, on that I demand the yeas and nays.
[[Page H358]]
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________