WASHINGTON—As negotiations over a potential legislative package of tax provisions continue, U.S. Senators Mitt Romney (R-UT) and Michael Bennet (D-CO) have proposed a bipartisan compromise to support American families, workers, and businesses. The Bennet-Romney proposal represents one path toward a compromise over certain components of the ongoing negotiations.
“Congress is nearing another deadline without a clear plan to deal with dozens of fundamental responsibilities that the American people expect us to address,” Romney and Bennet said. “With its focus on helping families raising young children, protecting medical innovation for patients, and bringing certainty to workers and businesses, our plan should be considered on merit alone. And while the intent of our proposal is not to address every aspect of the current negotiations, we believe it is a compromise that can help clear a path forward and break the current logjam.”
The Bennet-Romney proposal will:
- Expand and Reform Child Tax Credits
- Create a New Young Child Tax Credit: Create a new tax credit of $2,500 per child for children up to age six. The first $1,500 would be fully refundable, meaning that every taxpayer receives that amount regardless of income (up to the current law phase-out levels of $200,000 for individuals and $400,000 for couples). The next $1,000 would phase in at a 15 percent rate beginning at the first dollar of income, and begin phasing down at current law income thresholds.
- Reform Existing Child Tax Credit: Make critical reforms to a key measure that provides a $2,000 credit per child for children from age six up to age 17, including eliminating the current $1,400 cap on refundability, making the first $1,000 per child fully refundable regardless of income up to the phase-out threshold, and making the next $1,000 per child phase-in at a 15 percent rate starting at the first dollar income.
- These changes would apply to tax years 2019 and 2020.
- Make Technical Corrections to 2017 Tax Law
- Implement the full list of needed technical corrections to the 2017 tax law.
- Permanently Repeal the Medical Device Excise Tax
Included in the Bennet-Romney plan are fiscally responsible bipartisan proposals to fund these changes, such as:
- Passing the Charitable Conservation Easement Program Integrity Act
- Implementing the Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act
- Passing the Ending New Nicotine Dependencies (ENND) Act
- Replacing stepped-up basis with a carryover basis, with a $1.6 million exemption for individuals and an additional $3.7 million exemption for spousal inheritance