Unintended Consequences: Democrat’s Child Tax Credit Will Cost Jobs

President Biden’s first signature legislative accomplishment, the American Rescue Plan Act (ARPA), is now law. Nearly $1.2 trillion in fiscal aid will pour into the economy before October, and another $700 billion will be doled out over the next four years. As one of us has written previously, $1.9 trillion is a significant underestimate of the plan’s total cost if temporary expansions of several tax credits are permanently extended. The largest of these temporary policies is the expanded child tax credit (CTC), touted by Democrats as a boon to low- and middle-income households. In addition to being costlier than the sticker price, a permanent CTC expansion, a goal expressed by many Democratic lawmakers, would have the unintended consequence of reducing employment.

How Will the American Rescue Plan Impact Your 2021 Tax Liability?

Last week, President Biden signed into law the $1.9 trillion American Rescue Plan (ARP). The plan provides economic relief to households through the tax code, making several credits fully refundable and advanceable and providing stimulus checks that already started arriving in bank accounts this past weekend. We have created a web application to help users explore how the American Rescue Plan will impact their 2021 federal tax liability.

Pick Your Child Tax Credit

The Child Tax Credit (CTC) is all the rage these days. Democrats and Republicans both are advancing proposals to increase the maximum value of the CTC and make it available to more families. We have developed a web application to accompany our recent report. Design Your Own Child Tax Credit Reform allows any user to compare popular current proposals or choose the parameters of their own preferred custom CTC reform.

Almost-Speaker McCarthy

Four years ago, many commentators lamented that Hillary Clinton fell short of winning the Electoral College by less than 80,000 votes. “You Could Fit All the Voters Who Cost Clinton the Election in a Mid-Sized Football Stadium,” read a headline in Vanity Fair. Now, it is not just Hillary Clinton that lost by a hair.

Impact of the Coronavirus Pandemic on Red, Blue, and Swing States

From both a public health and economic perspective, the coronavirus pandemic has wreaked havoc on our country. More than 210,000 people have died, more than 435,000 individuals have been hospitalized, and more than 10 million jobs have been lost nationally. The US economy was 10 percent smaller in June than it was last December and is not projected to fully recover until some point in 2021 at the earliest.

A Deal for Coronavirus Fiscal Relief

We recently had the honor of testifying before the House Ways and Means Committee on the effects of inaction on coronavirus fiscal legislation. One of us was invited by the Republicans and the other by the Democrats. The basis of the hearing was the Heroes Act, a $3 trillion bill that passed the House in the spring on a party line vote with about $1 trillion in tax cuts and $2 trillion in new spending.

COVID-19 and Nursing Homes: National Updates and Early Evidence on the Second Wave

Evidence from the initial coronavirus outbreaks within the United States has shown that the fate of nursing home residents is tightly linked to the severity of the virus within the nursing home’s state. With a “second wave” of COVID-19 in many southern states and a host of policy changes, it is worth investigating whether the evidence suggests this vulnerable group is now better protected.