US Sens. Mike Lee, R-Utah, and Marco Rubio, R-Fla., Hope to expand the child tax credit again, three years after struggling to double the credit to $ 2,000 and make it reimbursable to reach more families in need.
The new proposal would increase the credit to $ 3,500 a year for school children and $ 4,500 for younger children.
Although they said that American families need and deserve some help, they were strongly opposed to turning credit into what is called a child benefit, paid to families monthly. Instead, the credit must remain in the tax code, paid when taxes are declared, he said.
By making a portion of the credit repayable, they said they will reach families who do not earn enough to pay taxes. But the two want credit to reward the work too, and that’s in their design. To obtain full credit, an individual or couple would need an adequate income from paid work to qualify.
“We are excited about the recent proposals to increase tax breaks for working families. Following our initiative, the 2017 Tax and Employment Reductions Act doubled the Child Tax Credit and expanded its eligibility to provide significant tax cuts for parents who work with children, ”they said in a joint statement recently.
“We have long said that the Child Tax Credit should be increased to help working families. In the current pandemic relief bill under consideration, we would support raising the Child Tax Credit to $ 3,500 and $ 4,500 for young children. ” they said,
The increase to $ 4,500 for young children eliminates the penalty for stay-at-home parents, according to Lee. At the moment, parents can also qualify for a childcare tax credit. But his proposal eliminates that credit and would instead give the additional $ 1,000 to young children, whether parents use daycare or not.
Several proposals are circulating about how best to help parents with the costs of raising their children – and the issue is arising at the same time that the US fertility rate has been falling. Demographers like Pamela S. Perlich, director of demographic research at the Kem C. Gardner Policy Institute at the University of Utah, say that if the number of children being born drops too much, there may be major ramifications in the future. Among these impacts are a less robust economy, a decrease in entrepreneurship and greater pressure on children as they age in the workforce and find that they have to support their own children and a social safety net for older adults that is greater than than the younger generation of workers.
“It really comes down to supporting young families and restructuring work and home life institutions in a way that young people feel economically secure about having more children,” Perlich recently told Deseret News. Parents and people who would like to be parents, but feel they cannot afford it, lament the high cost of raising their children, including housing and food, among others.
Senator Mitt Romney, of R-Utah, proposed giving families the equivalent of a children’s pension, paid monthly by the Social Security Administration. But neither Lee nor Rubio support child benefit, in part because they say it makes efforts to secure parents’ work difficult.
“We do not support the transformation of the Child Tax Credit into what has been called ‘family allowance’, paid as universal basic income to all parents. This is not a tax break for working parents; it’s social assistance, ”they said in their joint statement. “An essential part of being pro-family is being pro-work. Congress must expand the Children’s Tax Credit, without undermining the responsibility of parents to work to support their families. “
In a video explaining his proposal, Lee uses the example of two parents who earn a lot to point out what he calls a “parental penalty”. The video features a third family in which the parents work outside the home and receive money from the Tax Credit for Day Care, “although they already earn more” than the other two families. This exposes, explains the video, a penalty for parents who stay at home that President Joe Biden’s proposals would get much worse.
Key features of the Biden-backed proposal include raising the Child Tax Credit to $ 3,000 from its current $ 2,000 per child and making it fully refundable, for very low-income families to qualify. The credit would increase to $ 3,600 for children under 6, with a phasing-out income limit. Payments would be made monthly starting in July, if the IRS could be ready on time.
CNBC quoted Rubio as contesting in an opinion article the proposal supported by Biden. “If lifting families out of poverty were as simple as handing a check to mothers and fathers, we would have resolved poverty long ago.”
An analysis of the 2018 tax credit data after the pair pushed to expand Child Tax Credit in 2017 showed that the number of people who received the credit doubled, “benefiting American families across all income brackets, with the exception of people with higher income, “Rubio’s office announced in a 2019 press release.