Republicans in the House of Representatives passed the first two bills in a larger package intended as a follow up to last year’s overhaul of the tax code.
The package, dubbed “Tax Cuts 2.0,” isn’t expected to become law this year, but is meant to advance ideas on several topics that either weren’t addressed or were only temporary in the tax reform law passed last year. They’re also meant to provide one last round of issues for Republicans to campaign on in midterm elections, though the tepid reception in public polling to last year’s tax law has cast doubt on how much Republicans will run on tax cuts as they fight to maintain control of the House and Senate.
One of the bills passed today would reform how Americans save their money, in large part by creating universal savings accounts with tax benefits to try to streamline the current savings system. If passed into law, it would also expand 529 educational savings plans to allow them to be used for student debt, as well as trade schools and apprenticeships.
The other would change the tax treatment of startups to allow them to write off more costs and expand the benefits they receive for research and development. Ten voted for the savings legislation, while 31 supported the startup bill.
Both bills passed with modest support from congressional Democrats, in contrast to their universal opposition to last year’s tax law. Neither bill is expected to be taken up in the Senate.
Friday’s bill, which would make permanent the temporary individual changes and cuts made by last year’s tax law is expected to receive less support from Republicans. That’s primarily due to the fact that it would make permanent the cap on the federal deduction for state and local taxes paid, a provision opposed by several Republicans representing areas with higher local taxes, as well as being broadly opposed by Democrats.
