March 28, 2024
An Early Look at the Child Tax Credit Changes in the Tax Relief for American Families and Workers Act of 2024
Abstract The Tax Relief for American Families and Workers Act of 2024, which the US House of Representatives passed on January 31, 2024, and the Senate is now considering, would make important changes to the child tax credit (CTC) if enacted. The legislation would increase CTC payments for families with lower earnings, apply a one-year…
March 4, 2024
Social conservatives who care about marriage should think twice about a “per-child” refundable Child Tax Credit
The United States Senate is currently debating H.R. 7024, a House-passed bill that would modify the Child Tax Credit (CTC) in several ways. One of the most consequential changes would increase the rate at which the refundable portion of the credit phases in, from the current 15% rate applied to all families to 15% times…
February 27, 2024
Options for Improving the Child Tax Credit Provisions in H.R. 7024, the Tax Relief for American Families and Workers Act of 2024
H.R. 7024, the Tax Relief for American Families and Workers Act of 2024, passed the House on January 31, 2024 and now faces an uncertain fate in the Senate. The bill is intended to offer something for both Republicans and Democrats—business tax cuts and an expansion of the Child Tax Credit (CTC). But this bargain—which…
February 14, 2024
Debate: The Future of Family Policy
A new bill is making its way through Congress, aiming to expand the existing Child Tax Credit (CTC) policy. As part of a Dispatch debate series, associate editor Luis Parrales moderates a debate between Kevin Corinth of the American Enterprise Institute and Patrick T. Brown of the Ethics and Public Policy Center on the merits of the proposal. What are the tradeoffs of a work requirement? Should…
January 29, 2024
Per-Child Benefit in Wyden-Smith Child Tax Credit Bill Would Discourage Full-Time Work for Families with Multiple Children
The Wyden-Smith proposed tax legislation would make four changes to the Child Tax Credit (CTC). First, it would increase the cap on the refundable portion of the CTC, eventually to the same amount as the maximum non-refundable CTC. Second, it would begin indexing the maximum non-refundable CTC with inflation. Third, it would apply a one-year lookback for…
January 29, 2024
Let’s Not Turn the Child Tax Credit Into Welfare
A renewed effort to expand the child tax credit (CTC) is currently making its way through Congress. The proposed policy would increase benefits for low-income families—especially those with multiple children—automatically grow the credit with inflation, and most contentiously, eliminate the work requirement for families who had earnings in the prior year. In debating these changes and even…
January 26, 2024
Please Congress: Make Fiscal Sanity a Priority
Sometimes I don’t understand Republicans in the House of Representatives. When they are threatening government shutdowns, they make a great show of saying their highest priority is getting a handle on out-of-control federal spending, reducing the deficit, and bringing down our national debt. And yet, when an obvious opportunity falls in their lap to reduce…
January 19, 2024
The Work Incentive and Employment Effects of Eliminating the Child Tax Credit’s Annual Income Requirement
Abstract Senior House and Senate tax committee leaders agreed to a framework for modifying the Child Tax Credit on January 16, 2024. The most consequential reform would eliminate the Child Tax Credit’s annual income requirement by allowing individuals to calculate their eligibility using their current or prior year’s income, whichever year maximizes the family’s benefit….
January 17, 2024
Tax Extenders Package Would Cut the Child Tax Credit’s Annual Work Requirement in Half
One of the bills Congress punted to the new year is a package of “tax extenders” normally considered at year’s end when temporary tax laws are about to expire. But the agreement announced yesterday by House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR) is notable for far more than its timing. On the plus side, and to the negotiators’ credit, it’s a…
January 12, 2024
Congress Shouldn’t Expand Welfare in Return for Corporate Tax Cuts
Bipartisan negotiations to revive the Democrat-favored 2021 Child Tax Credit in return for Republican-favored business-tax cuts are heating up. The business-tax cuts could be helpful in principle — if they focus on encouraging future investment and don’t add to the deficit. But under no circumstance should Republicans agree to turn the Child Tax Credit into a welfare…