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House Democrat Richard Neal unveils sweeping benefits, tax credits for families

Boston, MA. – February 8: U.S. House Ways and Means Committee Chairman Richard Neal speaks at a press conference at the State House on February 8, 2021 in Boston, Massachusetts.

Matt Stone | Boston Herald | Getty Images

The Democrat in command of the House’s key tax-writing committee is offering a list of priorities aimed at providing sweeping new benefits to working parents and families.

Rep. Richard Neal, chairman of the House Ways and Means Committee and gatekeeper of new tax legislation, plans on Tuesday to outline investments in what Democrats are calling “human capital.”

Neal’s big-ticket bill — the Building an Economy for Families Act — would provide universal paid family and medical leave of up to 12 weeks. That amounts to about two-thirds of a worker’s wages.

The bill would also establish a new refundable payroll tax credit of up to $5,000 per year for wages paid by certain child-care providers and would create a new information network to give parents and guardians real-time information about available child care.

If passed, it would make permanent expansions to tax credits introduced in President Joe Biden’s $1.9 trillion Covid-19 relief package. Doing so would apply to the child tax credit, the earned income tax credit and the child and dependent care credit.

House Democrats have expressed particular support for locking in the expanded child tax credit passed under the American Rescue Plan.

That amped-up credit, which will start going to families in July, provides up to $3,600 per child for 2021 depending on the age of each child. Without additional legislation, the expanded credit is set to last only through the current year.

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Neal’s bill may put him at odds with the president, who has expressed doubts over its chances of success in a Senate split 50-50. Biden is expected on Wednesday to try to persuade lawmakers to back his American Families Plan, which would extend the strengthened child tax credit through 2025 but not extend it indefinitely.

That legislation, separate from the infrastructure-based American Jobs Plan, includes measures aimed at helping U.S. workers learn new skills, expand subsidies for child care and make community college tuition free for all.

National Economic Council director Brian Deese on Monday defended a plan to raise the capital gains tax on the nation’s wealthiest households to help pay for the president’s plan. Last week, multiple news outlets reported that the Biden administration will seek to raise the tax to 39.6% on households that make at least $1 million in annual income.

CNBC’s Ylan Mui asked Neal how he hopes to pay for the never-ending credit and the rest of the Building an Economy for Families Act and if he would support raising the tax rate on capital gains.

“We wanted to develop a design and then we will address the issue of revenue,” 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.

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2021-04-27 07:00:04

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