A historic 2025 tax debate formally kicked off this week with the House Ways and Means committee convening for the first time this year to begin what will be a complex, arcane and wide-ranging process that could take months to resolve.
But on day one inside the cavernous hearing room that is set to be an epicenter of Washington’s tax conversation in coming months, much of the first-day focus on Tuesday was on an issue well-known to pretty much every taxpayer: the child tax credit (CTC).
“The last thing families need is to see Washington slashing their child tax credit in half,” committee chair Jason Smith said, in one of many mentions of the topic.
The Missouri Republican highlighted how the 2017 Tax Cuts and Jobs Act raised this popular annual credit from $1,000 to $2,000, but will expire at the end of the year if Congress takes no action.
The CTC is not expected to be a major point of contention in the coming negotiations. But it is part of a case Smith is making — in part to spur his GOP colleagues toward quick action — that a tax deal is needed quickly, because of provisions that could help a variety of interested parties from families to corporations.
The tax-writing chairman held a press conference on Tuesday that focused on the impact on manufacturers in the coming tax effort.
The move to offer focus early on the popular credit was also seemingly designed to highlight an area of possible bipartisan agreement. Democrats have long supported the credit and spearheaded their own temporary expansion in 2021 when they controlled the levers of power in Washington.
But for families watching closely, confirmation of an extension could be slow in the offing. Any rewriting of that corner of the tax code is likely to remain at the whims of what could be a drawn-out process in other areas. Some hope to iron out the issues in a few months’ time, but others expect it could take the entire year.
Those issues are often politically knotty — and in some cases, less well-known — covering areas such as corporate and individual rates, corporate depreciation schedules, state and local tax (SALT) deductions, and many more.
And that’s not to mention paying for what could be a multi-trillion-dollar package.
Smith’s Democratic counterpart on the committee is Rep. Richard Neal of Massachusetts. He used his opening time on Tuesday to focus on the national debt and an overall Trump tax agenda that could add trillions in new red ink.
But Neal and other Democratic colleagues also seemed intrigued by the child tax credit’s prominence and often returned to the topic, in part to highlight the Democratic party’s long history with the topic.
