
The Child Tax Credit: Tradeoffs and Preferences
There has been a flurry of discussion in Washington recently about potential reforms to the child tax credit (CTC).
There has been a flurry of discussion in Washington recently about potential reforms to the child tax credit (CTC).
JD Vance and Kamala Harris have at least one thing in common: proposals to expand the child tax credit (CTC). Currently, the CTC offers households up to $2,000 per child under the age of 17.
Last month, former President Donald Trump declared, “If you’re an overtime worker, when you’re past 40 hours a week . . . your overtime hours will be tax-free.”
The Trump-Vance and Harris-Walz presidential campaigns have each recently proposed large expansions to the child tax credit (CTC). Both proposals might be intended to appeal to similar voters, but they vary significantly regarding budgetary cost, distribution of benefits, and effect on work incentives.
The nonpartisan Joint Committee on Taxation (JCT) recently provided lawmakers with a dynamic score and macroeconomic analysis of a policy to permanently extend the child tax credit (CTC) enacted in President Joe Biden’s American Rescue Plan Act of 2021 (ARP).