Boston, MA. – FEBRUARY 8: Richard Neal, Chairman of the US House Ways and Means Committee, speaks at a press conference at the State House on February 8, 2021 in Boston, Massachusetts.
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The Democrat, who heads the main tax writing committee in the house, offers a list of priorities that aim to bring broad new benefits to working parents and families.
Rep. Richard Neal, chairman of the House Ways and Means Committee and gatekeeper to the new tax law, plans on Tuesday to outline investments in what Democrats refer to as “human capital.”
Neal’s Big Ticket Bill – the Family Economy Building Act – would provide for universally paid family and sick leave of up to 12 weeks. That is around two thirds of an employee’s wages.
The bill would also provide for a new refundable tax credit of up to $ 5,000 per year on wages paid by certain childcare facilities and create a new information network to provide parents and guardians with real-time information on childcare available.
If passed, the tax credits introduced in President Joe Biden’s $ 1.9 trillion aid package for Covid-19 would be permanently expanded. This would apply to the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Tax Credit.
House Democrats have expressed their particular support for the freeze on the expanded child tax credit passed under the US rescue plan.
This top-up loan, which will go to families from July, provides up to $ 3,600 per child through 2021, depending on the age of each child. Without additional legislation, the extended loan should only be valid until the current year.
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Neal’s bill could bring him into conflict with the president, who has expressed doubts about his chances of success in a 50:50 split in the Senate. Biden is expected to try Wednesday to convince lawmakers to back up his American family plan, which would extend the increased tax credit for children through 2025, but not extend it indefinitely.
Separate from the US infrastructure-based employment plan, this legislation contains measures designed to help US workers learn new skills, expand childcare subsidies, and make tuition fees free for everyone at Community College.
National Economic Council director Brian Deese on Monday defended a plan to increase capital gains tax on the country’s richest households to help pay for the president’s plan. Last week, several news outlets reported that the Biden government will seek to raise the tax to 39.6% for households with an annual income of $ 1 million or more.
CNBC’s Ylan Mui asked Neal how he was going to pay for the never-ending loan and the rest of the law to build a family economy, and if he would support raising the tax rate on capital gains.
“We wanted to develop a design and then we’ll look at sales,” he said. “But treat this as an economic investment. This is about increasing productivity. This is about increasing stability in our homes.”
– CNBC’s Ylan Mui contributed to this report.