A recent analysis by the Center on Budget and Policy Priorities (CBPP) has shown that expanding the Child Tax Credit has emerged as a top tax priority in future economic legislation.
“Top tax bill priority should be to ensure 19 [million] kids in families with low incomes receive the full [Child Tax Credit] just like kids in higher-income families – a far higher priority than the bloated list of corporate tax breaks the House GOP is about to unveil," Chuck Marr, vice president for Federal Tax Policy at the Center on Budget and Policy Priorities, wrote on Twitter.
Data in the CBPP report showed that due to the temporary expansion of the credit, millions of children from low-income families are either receiving reduced amounts or no credit at all, while their higher income counterparts have the full $2,000 credit per child. The article strongly advocates for prioritizing the expansion of the credit for children in the upcoming tax legislation.
The report added that the estimated cost of expanding the Child Tax Credit is about $12 billion per year until 2025, which is much lower than the combined cost of corporate tax breaks lobbyists are promoting. The anticipated tax package from Republican lawmakers includes measures to decrease taxes for businesses, like restoring favorable tax treatment for research and experimentation expenses, as well as extending full expensing of equipment and relaxing the limit on business interest deductions. The report warns that expanding the corporate tax breaks without concurrently implementing a significant expansion of the Child Tax Credit.
The expansion of credit in 2021 through the American Rescue Plan led to a major drop in poverty rates, and also narrowed the poverty gap between children of different racial and ethnic backgrounds, according to a report by census.gov. The report showed that child poverty dropped to the 46% going from 9.7% in 2020 to 5.2% in 2021.
The CBPP report urged policymakers to prioritize children’s welfare more than corporate interests. If not, millions of children from low-income families will receive diminished credit amounts or no credit.
