By Jason Smith
Tax relief for Missouri’s working-class families
February 9, 2024
When my colleagues selected me to lead the Ways and Means Committee in Congress, which has responsibility for writing our tax laws, I promised that my number one priority would be looking out for the interests of working-class Americans, small businesses, and family farmers. From day one in my role as Chairman, I have worked around the clock to write legislation that would deliver on that promise. The Tax Relief for American Families and Workers Act, a pro-worker, pro-family, and pro-American tax cuts package will directly benefit thousands of hardworking families in southeast and south-central Missouri. Having passed the House of Representatives with overwhelming support on January 31, this bill is one step closer to becoming law.
A key pillar of the legislation are reforms to the Child Tax Credit (CTC). The CTC is critically important to the working-class families I am fighting for in Washington. It was originally created by Republicans back in the 1990’s to give families struggling with the high costs of raising a family some additional tax relief. In 2017, President Donald Trump’s landmark Tax Cuts and Jobs Act (TCJA) doubled the CTC to $2,000.
More than 73,920 families in southeast and south-central Missouri claim the CTC. Thanks to the tax relief legislation, a family with three children making minimum wage would now be eligible for a $5,400 credit, which is the maximum amount per child. If Congress does not send this bill to the president’s desk, that same family would only be eligible for a credit of $3,462.60. With all the struggles families are facing because of the Biden economy, that is desperately needed relief.
In the TCJA, President Trump prioritized making sure that illegal immigrants were not given these generous benefits meant to help working American families. For the first time ever in the history of the Child Tax Credit, we added a Social Security Number protection. Prior to 2017, that never existed. This new law extends those strong protections that prevent illegal immigrants from being able to receive the CTC.. However, that provision in the TCJA that established guardrails preventing illegal immigrants from benefiting from the CTC is set to expire at the end of 2025. It requires congressional action to extend or make it permanent; yet another reason why Congress should act quickly to get the Tax Relief for American Families and Workers Act enacted into law.
Today’s economy is incredibly tough for farmers and ranchers, whether it is the skyrocketing cost of fertilizer, diesel, or equipment. That is exactly why I worked to include a provision in this new tax relief package to raise the expensing cap for small businesses and farmers. This will directly benefit more than 30,000 farmers and ranchers in southeast and south-central Missouri. In addition, the bill’s 100 percent immediate expensing provision will allow farmers and ranchers to write off the equipment and machinery they use to produce the best food, feed, and fertilizer found anywhere in the world.
Anyone who runs a farm, ranch, or business knows how costly and time consuming it can be to deal with burdensome red tape. Under the Tax Relief for American Families and Workers Act, the reporting threshold for businesses that use subcontract labor would increase from $600 to $1,000 and be indexed for inflation – the first update to that threshold since the 1950s. For example, under current law, a rancher who pays someone more than $600 to haul hay or put up a fence would have to fill out a 1099 tax form. By increasing the threshold to $1,000, farmers, ranchers, and small businesses will have less paperwork and more time to spend running their operation.
As a family farm owner, I know how critically important it is to invest in agriculture research, including finding ways to produce more with less and increasing crop resiliency. The Tax Relief for American Families and Workers Act allows businesses of all sizes to immediately deduct the cost of their U.S.-based research and development (R&D) investments instead of over five years.
On my annual Farm Tours, I have visited numerous innovative, tech-driven ag businesses in southeast and south-central Missouri that use research to help farmers maximize production and achieve their crop goals.
