August 30, 2024
Harris’s Child Tax Credit Plan Punishes Working Families
Vice President Kamala Harris recently announced an economic plan for her presidential campaign. A centerpiece is the transformation of the Child Tax Credit (CTC) into a child allowance. If it became reality, the policy would discourage parental employment and risk harming the long-run prospects of children. These unintended consequences together with the plan’s cost should…
August 28, 2024
Some Context Behind JD Vance’s Child Tax Credit Comments
Recently, GOP Vice Presidential nominee JD Vance said on Face the Nation “We should expand the child tax credit… I’d love to see a child tax credit that’s $5,000 per child.” He further proposed that the expanded credit be extended to “all American families,” emphasizing disparities in the availability of the current child tax credit…
August 24, 2024
Harris’s Child Tax Credit Proposal Could Backfire, Perpetuating Poverty
A centerpiece of Vice President Harris’ newly released economic plan is a revamped Child Tax Credit, which would send families $6,000 for each newborn and up to $3,600 for older children, up from the existing $2,000 per child credit. Her proposal follows Vice Presidential candidate J.D. Vance’s recent call to increase the credit to $5,000…
August 7, 2024
A Bipartisan Solution to the Child Tax Credit Impasse
Last week, the Senate rejected a child tax credit revision that had bipartisan House support. It would have enabled more of the credit to be refundable to families with no employment income. Republican senators voted against it because they believed that providing unconstrained income to poor households would reduce their work effort. This was one of…
June 10, 2024
Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence
AbstractThe 2021 Child Tax Credit (CTC) expansion increased government benefits to families, andespecially to families with the lowest incomes. Economic theory predicts that this policyintervention would have led to a reduction in labor supply among adults in those families. Ourreview of available research suggests that employment within broadly defined demographicgroups was not reduced by the…
May 30, 2024
The Contradictions in Democrats’ Child Tax Credit Expansion Promises
Politicians regularly vie for the support of parents with promises of good schools, bigger family benefits, and tax relief. President Joe Biden did just that last week in calling for increased funding for public education, child care, and more. Sometimes just the language of the proposal—like the president’s call to expand the child tax credit (CTC)—appears to…
May 16, 2024
Critiquing Bastian (2022, 2023, 2024, and forthcoming):On Child Tax Credit Reform and the Sensitivity of Single Mothers to Work Incentives
Abstract In 2021, Congress passed and President Biden signed a major, but temporary, reform to the Child Tax Credit (CTC). Among other reforms to the credit, the American Rescue Plan Act (ARPA) made it available to non-workers on the same basis as workers. Attempts to make this reform permanent foundered, in part, due to opposition…
April 17, 2024
Fiscal Sanity Please, Senators
The Wyden-Smith tax bill, which combines an expanded child tax credit (CTC) with a variety of business tax breaks, has been in limbo in the Senate for the past three months. Majority Leader Chuck Schumer has promised to bring up the bill if there’s enough support, but so far, these votes have not been forthcoming…
April 9, 2024
The Child Tax Credit: My Long-Read Q&A with Kevin Corinth
The Child Tax Credit is a tax benefit available to many American families for the purpose of reducing their federal income tax liability. It’s specifically designed to help offset the cost of raising children. The CTC of today, however, differs starkly from its pre-pandemic structure. Many economists, including Kevin Corinth, think that the post-pandemic changes were a step…
April 8, 2024
The $1,000 Tax Hike on Middle-Class Families
When Americans file their taxes in the coming weeks, one group will be singled out for a tax hike: middle-class families with children. This April, a family with three children making at least $42,000 will pay about $950 more in (inflation-adjusted) federal income taxes than they paid in 2018 — when the Tax Cuts and Jobs…