U.S. Treasury Secretary Janet Yellen testifies during a Senate Finance Committee hearing on the 2025 budget at the Capitol on March 21, 2024 in Washington, USA.
Elizabeth Franz | Reuters
WASHINGTON — Treasury Secretary Janet Yellen defended President Joe Biden’s claims Thursday. 2025 budget The proposal came as Republican senators said they were concerned that taxes for the middle class would rise as a result of the law, which is set to expire next year.
During a Senate Finance Committee hearing where Yellen was testifying, Sen. Steve Daines (R-Mont.) said, “President Biden has long vowed not to raise taxes on individuals making less than $400,000 a year.” ” he said.
“And now, President Biden Tax Cuts and Jobs Act “With the expiration and increase in the corporate tax rate, American families and workers will be forced to bear the cost of these ‘woke’ policies,” Daines said, referring to the 2022 Clean Energy Policy. inflation control law.
Provisions of the TCJA, the landmark tax law proposed by the Trump administration and passed by Congress in 2017, that expires in 2025 include the child tax credit.
This credit allows taxpayers to reduce their tax liability by up to $2,000 per qualifying child, with an income threshold of up to $400,000 per family. The additional “Other Dependents Credit” provides a $500 tax credit to people earning less than $400,000 who have qualifying dependents who are not eligible for the Child Tax Credit.
Biden’s budget Reinstate the expanded child tax creditannounced the White House.
“Do you agree that if the child tax credit provisions of the TCJA are not extended, Americans making less than $400,000 a year will also see their taxes increased?” Sen. Mike Crapo (R-Idaho), ranking member of the committee. asked Yellen.
Yellen said Biden had “committed not to raise taxes on families earning less than $400,000” and expressed “commitment to the importance of the Child Tax Credit, which dramatically lowers child poverty.” .
TCJA Doubles existing child tax credit to $2,000the 2021 American Rescue Plan temporarily increased the credit amount by $1,000 to $1,600 during the pandemic, according to the National Conference of State Legislatures.
The credit is Child poverty rate will increase by 46% in 2021according to the U.S. Census Bureau, the lowest rate on record, from 9.7% in 2020 to 5.2% in 2021.
Biden’s $7.3 trillion spending proposal aims to reduce the federal deficit by $3 trillion over the next 10 years without raising taxes on Americans earning less than $400,000 a year.
The budget would increase income tax by imposing a minimum 25% tax on unrealized income for the wealthiest households. Corporate Alternative Minimum Tax for IRAs The tax rate for billion-dollar companies will rise from 15% to 21%, while the larger corporate tax rate will rise to 28%.
House Republicans sought to reduce the budget deficit by about $14 trillion over the next 10 years by cutting the Inflation Control Act. Individual budget resolutions It was introduced in early March.
An agreement was reached this week to fund the Department of Homeland Security, but six months into the fiscal year, lawmakers still haven’t decided on a permanent budget. It is the latest in a series of funding bills to be considered ahead of a looming deadline on Saturday to avert a government shutdown.
