Law Child Tax Credit Thread: Expansion not included in Omnibus/ will expire for 2022

Props to Biden if he keeps the $400K phase out although I would argue it should be $500K. One size doesn't fit all when you have two states that tax the feck out of you and have atrocious costs of living.

Global Warming is 10 years away from killing the weather aspect of CA anyways...
 
No, thanks. This is pretty sad though.


that's depressing......... I'm glad my kids arent in their primes having their lives deprived, however, staring at screens all day is depressing its own right.
 
Even 2k is a joke.


What really irks me is how fast they rushed to give away billions to rich folks, but you get months-long fights over how small a pittance we should receive.


FTR, I don't even need the money. I've been fortunate enough to still have work during all this. For many, this is not the case.
my wife was telling me they lowered the cutoff rate? Gonna be sad if true, I may not get anything......
 
Great post overall, and great to see Romney making that proposal, as it could be the start of a sane GOP agenda (pro-natalist, pro-family--stuff that could actually make life better for regular people). I think the con arguments are bad, though. First, making the credits refundable means that there's no work disincentive until you get to the phase-out (that is, it provides a slight disincentive for people/families who make more than $200K/$400K to work additional hours, but no disincentive before that). And second, the money benefitting the parents over their children is just as much a concern if we're talking about market income, but I think it's self-evidently absurd to think that higher market income for parents is bad because they might not use it for their kids' benefit (and I'd bet that the lower parents' incomes are on average, the higher portion of it goes to their kids' needs--if anyone is aware of evidence that contradicts this, please post).

I think you could still argue that a person who works hourly and makes say 43k/year might choose to work less hours with the offsetting credit. But to counter that, it may also be seen a pro argument because it allows more time for the parent to be back at the household.

The only reasonable con argument I can see is related to the cost, though A) I think this would be a relatively good use of limited resources and B) in the long run, it probably more than pays for itself through the demonstrated benefits of lower child poverty (for example, the stress of poverty tends to interfere with kids' mental development, and alleviating that makes them more productive and less likely to be criminal later in life).

I didn't really see many arguments for cons. Even though some of the GOP will be against it, I think the majority consensus looking at it now and the past four administrations, is it is a good piece to the tax code or just redistribution in general. The only con really is cost but that's always a con you have to weigh against and Romney's plan does offset some of it already while the Democrat's plan likely will do so too in some manner. I haven't looked into anything yet since Monday so I definitely have some follow up here.

This might be a whole thread in itself but stepping back a little bit here, I think it's very clear right now that Biden's current agenda looks to redistribute between generations. Look at student loan forgiveness, this credit, and the housing tax credit he's proposed that I haven't covered yet. All of those focus on the younger generation far more. This isn't to say his policies are anti-boomer or anything but the more I look at it, it does seem like a deliberate direction being focused on here.
 
That’s what the article said. $75k for singles, $150k for couples.

Funny how Biden said no higher taxes for anyone making less than $400k.

Yea, that definitely would be significant. I don't know where I stand on where the cap generally should be but I'm generally in favor of taxation being simplified/ predictable (for an individual/ average person), fairly progressive, and not overly excessive/ burdensome on any bracket. That isn't to say it has to be low rates but it shouldn't continually be desperate in seeking in revenues again and again to fund continuously new programs.
 
New development on this. I mentioned Senators like Rubio and Lee possibly could've been allies of Romney's bill on this but it appears that is not the case with difference in the credit not being tied to income.

Rubio, Lee Statement on Child Tax Credit
Washington, D.C. — U.S. Senators Marco Rubio (R-FL) and Mike Lee (R-UT) released a joint statement on new proposals to further expand the Child Tax Credit, which they successfully expanded in 2017 and tax return data confirmed has had a positive effect on millions of American families:

“We are encouraged by recent proposals to increase tax relief for working families. Upon our initiative, the 2017 Tax Cuts and Jobs Act doubled the Child Tax Credit and expanded its eligibility to provide significant tax cuts to working parents with children.

“We have long said that the Child Tax Credit must be further increased to help working families. In the current pandemic relief bill under consideration, we would support increasing the Child Tax Credit to $3,500, and $4,500 for young children.

“However, we do not support turning the Child Tax Credit into what has been called a ‘child allowance,’ paid out as a universal basic income to all parents. That is not tax relief for working parents; it is welfare assistance.

“An essential part of being pro-family is being pro-work. Congress should expand the Child Tax Credit without undercutting the responsibility of parents to work to provide for their families.”

It says this came out 2/4 but I don't recall this being in the news at the time of making the thread.

Rubio and Lee are proposing to keep it tied to work and off a higher credit of 3,500 and 4,500 for children under 6. So we have three different proposals at this point between House Dems, Romney and Rubio/Lee (with a fourth being Booker/Pressley's older one from a few years back).

A new child tax credit expansion could provide monthly income. Some question whether the help is too much or too little
CNBC
House Democrats’ proposal, which was released this week, calls for raising the credit to $3,600 per child under age 6, and $3,000 per child for those up to and including age 17.

The bill would make it so families can opt to receive payments monthly, instead of having to wait for one lump sum at the end of the year. Families could receive up to $300 per month per child under 6 and $250 per month per child ages 6 to 17.
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Rubio and Sen. Mike Lee, R-Utah, released a joint statement this month calling for Congress to expand the child tax credit without “undercutting the responsibility of parents to work to provide for their families.”

“We do not support turning the Child Tax Credit into what has been called a ‘child allowance,’ paid out as a universal basic income to all parents,” Rubio and Lee said. “That is not tax relief for working parents; it is welfare assistance.”

Together, the senators have put forward an alternative proposal for raising the credit to $4,500 per child under 6, and $3,500 for older children. Work, however, would be a key requirement under the plan.

Yet other experts argue that the key point of the Democrats’ plan is making the money more accessible to families to help fight poverty. Therefore, tying the benefit to income would be counterproductive.

Rubio attacked Romney’s child allowance proposal as ‘welfare.’ Why are conservatives fighting over family support?

Washington Post
Last week, Sen. Mitt Romney (R-Utah) caused a stir by introducing the Family Security Act, an ambitious proposal that would create a universal child allowance. For all parents, excluding the wealthiest families, the government would send $250 a month per child for youngsters ages 6 to 17, up to five children, and $350 for newborns to 5-year-olds.

The plan would replace several other benefits and tax breaks, including the Child Tax Credit, part of the Earned Income Tax Credit, Temporary Assistance for Needy Families, and the state and local tax deduction, and so would not increase the deficit. The allowance would cut child poverty by a third, according to the center-right Niskanen Center. Some conservatives have publicly supported it as a pro-family and pro-work alternative to welfare; that includes one of us, who has briefed Romney, Sen. Marco Rubio (R-Fla.) and Senate staffers on child benefits.

But Rubio, one potential ally, immediately criticized Romney’s proposal as “not tax relief for working parents” but “welfare assistance.” This might seem surprising, since Rubio has been among the strongest advocates of expanding the Child Tax Credit so that it would reach more working-class families. Why did Rubio object to a deficit-neutral plan from another Republican, which seemed to resemble policies he has championed in the past?
 
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Vox put out a piece highlighting Booker and Pressley's bill about Baby Bonds as well now that this whole debate is back in Washington.

Baby bonds could shrink the Black-white wealth gap
Vox

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Under the American Opportunity Accounts Act reintroduced this month by Sen. Cory Booker and Rep. Ayanna Pressley, a baby bonds program would give every child in America a savings account seeded with $1,000 when they are born. Children would receive up to $2,000 more each year, depending on their family’s income, and wouldn’t be able to access the funds until they turn 18. A child from a low-income household has the chance to receive around $46,000 by then, to be used for buying a home, paying for school, or starting a business.

“To truly ‘build back better’ our economy, we cannot ignore the extreme and persistent wealth inequality that deprives kids of economic opportunity right out of the gate,” Booker told Vox. “We know this growing gap has been driven in part by federal policies and a federal tax code that subsidizes asset building for some Americans but fails to extend and expand that opportunity for all Americans. Baby bonds will start to level the playing field.”
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So the 1.9T relief bill is going out, the temporary provisions to the Child Tax Credit are in place now.

Key takeaways:
-The credit is increased from 2,000 to between 3,000-3,600 dependent on the childs age
-The credit use to only be partially refundable (1,400 out of the 2,000). This year, the full amount will be, meaning you can receive the entire credit even if your tax liability is less than the credit.
-A very big piece here, the credit will be paid out monthly rather than received when filing one's tax return. Since the year already kicked off, monthly payments will begin in July and the first half will be paid out on the return. I think there are some complications to W-4 elections here but it will get the money to people faster, which you would think is the point since it's tied to a relief bill.
-The expanded portion of the credit (above 2,000) had an income limit of 75k/single or 150k/married similar to the stimulus payments. The 2k part of the credit which already existed prior to this is still available to those making 100k/single 200k/married.

This sets the stage for a permanent restructuring/ possible expansion to the credit. Though there are divisions with republicans here, it seems like democrats may get some votes if there are supporters behind the Romney plan which isn't too different from this temporary measure but does have different means in funding it (cuts to other programs like SNAP, eliminating SALT tax deduction, etc). Lee and Rubio came out against the refundable piece being expanded and want to keep it related to earning enough income to generate that level of tax liability. You would think near the end of 2021 there will be pressure to come up with a permanent solution. You could argue the Biden administration has successfully taken a piece of the relief bill legislation and used it to be able to springboard into a permanent policy measure. Time will tell.


Child Tax Credit: Millions of parents could soon get up to $3,600 per child
CBS
The $1.9 trillion stimulus bill is aimed at shoring up the pandemic-stricken U.S. economy through tried-and-true fiscal measures like expanded unemployment aid and direct stimulus checks. But the legislation also includes a relatively novel measure that offers a form of guaranteed income to parents of children under 18, or what one expert calls "a baby step toward universal basic income."

That's because the relief bill includes an overhaul of the Child Tax Credit (CTC), a 24-year-old part of the nation's tax law that today primarily benefits middle- and upper-income families. The American Rescue Plan overhauls the CTC by expanding the benefit from $2,000 annually to as much as $3,600 per child. It also includes more low-income households and doles out the credit's benefit through monthly cash payments.

Those changes could have a major impact on millions of families, especially low-income households and those whose earnings can fluctuate from month to month. More than 4 million children could be lifted out of poverty, particularly children from Black or Latino families, according to analysis from the Center on Budget and Policy Priorities.
 
Americas birth rate is the lowest it’s been in decades, which will make it difficult to sustain its aging population down the line.

To fix this we either need more immigration to pick up the slack, or need to help make it easier for the native population to increase the birth rate. Ironically both of those things seem to be somewhat frowned upon by the right, but at least there seems to be bipartisan support for the child tax credit.
Its the same in Western Europe there is a reason why the birth rates are low its economic reasons.

To fix this we either need more immigration
I have heard this one before.
 
Its the same in Western Europe there is a reason why the birth rates are low its economic reasons.

Sort of but not entirely... Look at the list of the countries with the highest birth rates, and you will find they are mostly impoverished African countries (much worse off economically than US or European people)
Overall education level plays a key role... its inversely correlated with fertility (because most people in civilized countries become smart enough to know better).

I have heard this one before.
Well as I said, if you want to be able to sustain a country's aging population you have two options:
• Incentivize the native population to increase its birth rate to around 2.0 (via "handouts")
• Increase immigration

So its pick your poison.
 
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Didn't initially catch this but Rubio did an Op-Ed on the CTC about a month ago. May be a little outdated but gives his reasoning behind what he thinks makes the credit good compared to what the relief bill did.

Biden’s Child-Care Plan Is Wrong for Families and Ignores the Lessons of the Past
National Review
America’s families are in crisis. The pandemic has placed major strains on American families, as shown by rising household debt numbers. But even before the pandemic, Americans were getting married less and having fewer children than ever before, and the cost of living for middle-class families was far too high.

The immediate task of pandemic relief must be to help restore families’ financial health. That’s why I support and have called for President Biden to increase the latest round of stimulus checks from $600 to $2,000 per person, including children.

I will gladly support more pandemic relief for families. But while President Biden and Democrats in Congress claim to support them also, buried in their $1.9 trillion spending plan is a proposal that would create a new program to give monthly cash payments to parents, not just for the pandemic, but permanently.
 
Child tax credit expansion sets up showdown with GOP
PBS
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The massive coronavirus relief plan making its way to President Joe Biden’s desk includes a plan to temporarily raise the child tax credit that could end up permanently changing the way the country deals with child poverty.

It also sets up a potential political showdown with Republicans over an issue that Democrats believe could drive significant wins for the party in the 2022 midterm elections and beyond.

The American Rescue Plan, expected to receive final approval this week, temporarily raises the child tax credit, now at a maximum of $2,000, to as much as $3,600 per child annually. The plan also expands the credit so it’s fully available to the poorest families, instead of restricting it based on the parents’ tax liability. And it will be paid out in monthly installments, to offer families struggling during the pandemic a more consistent lifeline.

In the short term, said Democratic strategist Josh Schwerin, the expansion of the tax credit and other immediate aid included in the $1.9 trillion bill provide real evidence of Democratic action to help middle-class families.

New child tax credit could slash poverty now and boost social mobility later
Brookings Institute
Child poverty is center stage in current policy debates, at last. Far too many American children grow up poor. One in seven children live in poverty, according to the official poverty measure; one in eight by the supplemental poverty measure (which accounts for government transfers).

President Biden has just signed into law a bill that fundamentally restructures the child tax credit for one year as part of a larger relief package. The policy expands the child tax credit and delivers it periodically rather than as a lump sum at tax time—effectively instituting a child allowance administered through the tax code. Under the plan, low- and middle-income families with children will receive a yearly total of $3,000 per child aged 6 to 17 and $3,600 per child under 6.

Looking at the supplemental poverty measure (SPM), this single provision is projected to reduce child poverty from nearly 14 percent to 7 and a half percent—a 45 percent reduction—according to researchers at Columbia University’s Center on Poverty and Social Policy. The payments are projected to drastically cut child poverty across racial groups, but with particularly large reductions for Black, Hispanic, and Native American children. Similar reductions are expected for the number of children living in deep poverty.

 
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Could we just get help for people crushed during the pandemic FFS.
Something as big and clunky as the government targeting a specific group of people without trampling on their privacy.
 
So the 1.9T relief bill is going out, the temporary provisions to the Child Tax Credit are in place now.

Key takeaways:
-The credit is increased from 2,000 to between 3,000-3,600 dependent on the childs age
-The credit use to only be partially refundable (1,400 out of the 2,000). This year, the full amount will be, meaning you can receive the entire credit even if your tax liability is less than the credit.
-A very big piece here, the credit will be paid out monthly rather than received when filing one's tax return. Since the year already kicked off, monthly payments will begin in July and the first half will be paid out on the return. I think there are some complications to W-4 elections here but it will get the money to people faster, which you would think is the point since it's tied to a relief bill.
-The expanded portion of the credit (above 2,000) had an income limit of 75k/single or 150k/married similar to the stimulus payments. The 2k part of the credit which already existed prior to this is still available to those making 100k/single 200k/married.

This sets the stage for a permanent restructuring/ possible expansion to the credit. Though there are divisions with republicans here, it seems like democrats may get some votes if there are supporters behind the Romney plan which isn't too different from this temporary measure but does have different means in funding it (cuts to other programs like SNAP, eliminating SALT tax deduction, etc). Lee and Rubio came out against the refundable piece being expanded and want to keep it related to earning enough income to generate that level of tax liability. You would think near the end of 2021 there will be pressure to come up with a permanent solution. You could argue the Biden administration has successfully taken a piece of the relief bill legislation and used it to be able to springboard into a permanent policy measure. Time will tell.


Child Tax Credit: Millions of parents could soon get up to $3,600 per child
CBS

Insane. I didn't even know about this. Man Dems are handling business right now. Money should have come a lot faster but I didn't expect anymore money period.
 
Insane. I didn't even know about this. Man Dems are handling business right now. Money should have come a lot faster but I didn't expect anymore money period.

They actually were pretty fast considering how long budget reconciliation takes. They could’ve risked negotiating with republicans but decided they could go that other route with 50 votes and get it done faster. It seems like the bet paid off.
 
They actually were pretty fast considering how long budget reconciliation takes. They could’ve risked negotiating with republicans but decided they could go that other route with 50 votes and get it done faster. It seems like the bet paid off.

No I don't mean the money they are sending out now. That's fine it seemed pretty fast. I'm talking about this other money that you posted about. Seems like this wont start going out until July. Even then you might have to claim it on your 2021 return or something like that. So I think that money is coming a little slow but the $1400 + $1400 for dependents was fast.
 
No I don't mean the money they are sending out now. That's fine it seemed pretty fast. I'm talking about this other money that you posted about. Seems like this wont start going out until July. Even then you might have to claim it on your 2021 return or something like that. So I think that money is coming a little slow but the $1400 + $1400 for dependents was fast.

Oh, yea. So it will begin monthly in July and the first six months that weren’t paid monthly will be caught up on the 2021 returns. I think the fact in the timing makes it somewhat clear this was a jumping off point with the relief bill. It likely will kick in once the economy is opened up and things begin getting back to normal. I mean, the unemployment extension only lasts to September and it got shortened cause manchin thought that even might to late for how fast things could come back. This is going to get people use to seeing about 250 showing up each month and will make it very difficult for it to just end in 2021. I’m not sure if the IRS or SSA administers the payment but it isn’t surprising it takes a little bit to get this in place.
 
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