An Update on the Tax Relief for American Families and Workers Act of 2024

Earlier this year, Senate Finance Committee Chair Ron Wyden (D – Oregon) and House Ways and Means Committee Chair Jason Smith (R – Missouri) introduced House Resolution 7024, the Tax Relief for American Families and Workers Act of 2024 (the “tax bill”).

The tax bill was passed by the House of Representatives on January 31 by an overwhelming 357-70 vote. Despite bipartisan support, the tax bill faced significant opposition in the Senate, where critics argued it prioritized short-term fixes and failed to adequately address long-term fiscal concerns.

If enacted, the tax bill would have:

• Reinstated the aptly called “Big Three” business tax breaks
  • Immediate deductions for domestic research and experimentation costs
  • Restoration of 100% bonus depreciation
  • Limits on the IRC Code Section 163(j) deduction for business interest expense
• Terminated the employee retention credit effective January 31
• Extended child tax credit benefits

 In late July, Senate Majority Leader Chuck Schumer (D – New York) scheduled a cloture vote to bring the tax bill to the Senate floor for debate and a final vote. Shortly thereafter, the Senate voted 48 to 44 against taking further action on the tax bill. This was short of the minimum 60 votes required to avoid a filibuster and proceed to floor vote.

Although conventional wisdom is that the tax bill will not be taken up by the Senate in 2024, not all hope is lost. Senator Schumer took a subtle step in voting “no” on the cloture vote, a procedural move that will allow him to schedule another vote on the tax bill later in the year.

Could Senator Schumer’s call for a cloture vote ahead of the August recess have been politically motivated? Some analysts believe Senator Schumer called for a cloture vote to highlight the limited GOP support for the tax bill, which was then validated by the fact that only three Senate Republicans voted in favor of bringing the bill to the Senate floor. It’s within the realm of possibility that vulnerable Senate Republicans could change their stance on the tax bill should Senator Schumer choose to reintroduce the legislation later this year.

Congress will be in recess until September 9, so we expect a light legislative tax news cycle through then. Stay tuned to claconnect.com and our real estate industry blog for future developments.