Is It A Trap? Congress Announces Bipartisan Plan To Expand Child Tax Credit
It's a 'bipartisan deal' and Republicans are getting some pretty major tax cuts as well.
This morning, House Ways and Means Chair Jason Smith (R-Missouri) and Senate Finance Chair Ron Wyden (D-Oregon) announced a bipartisan tax deal that would allow for $33 billion to be spent on (finally) (somewhat) (re)expanding the child care tax credit, which notably lifted four million children out of poverty in 2021.
It would also, because bipartisan, give Republicans $33 billion to extend many of the the Trump tax cuts, which is a thing that will make rich people happy. (The Guardian was up on all of this days ago, and it’s much clearer about the “pay-fors” than any other source we’ve seen.)
But that’s not all. The New York Times reports:
It would also include an increase of a tax credit to encourage the development of low-income housing, tax relief for disaster victims and tax breaks for Taiwanese workers and companies operating in the United States. The package would be financed by reining in the employee retention tax credit, a pandemic-era program to encourage employers to keep workers on payroll that has become a hotbed of abuse.
Well, that’s nice.
As far as the Child Tax Credit goes, the new agreement adjusts for the fact that low income families who don’t pay income taxes actually get less money from the Child Tax Credit than do middle and higher income families — and yes, you actually are reading that right. (Under the American Rescue Plan, for the first time, the credit became “refundable,” meaning it went to people too poor to pay income taxes too. For that one year, four million fewer children lived in poverty.) The adjustment, while keeping the work requirements, would allow those families to get $1800 of the full $2000 credit right away and then incrementally raise it to the full $2000 that the middle and higher income get.
To boot, this is also an economic stimulus plan, as it is pretty much guaranteed that all of that money would be very swiftly pumped back into the economy — which is not so much the case for those who are not living paycheck to paycheck.
The New York Times reports that the bill would “also make the credit more accessible for families with multiple children, allow parents to use their previous year’s earnings to claim a larger credit and automatically adjust for inflation beginning in the current tax year,” which is nice.
Unfortunately, the credit would not come as monthly checks but as annual payments, which are not quite as helpful when one is living paycheck to paycheck.
The bill will also “incentivize” research and development in some capacity, which people may want to keep in mind vis a vis arguments that pharmaceutical companies need to charge Americans so much money in order to fund their “research and development.”
“Fifteen million kids from low-income families will be better off as a result of this plan, and given today’s miserable political climate, it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead,” Wyden said in a joint statement with Smith. “At a time when so many people in Oregon and all across America are getting clobbered by rising rents and home prices, the improvements this plan makes to the Low-Income Housing Tax Credit will build more than 200,000 new affordable housing units.”
Ohio Senator Sherrod Brown is also happy about the deal.
“This bipartisan tax deal is a win-win that will cut taxes for Ohio families and Ohio manufacturers. The deal’s expansion of the Child Tax Credit will help parents keep up with the rising cost of living and ensure that their hard work pays off,” Brown said in a statement of his own. The deal also ensures that residents of East Palestine won’t get hit with a surprise tax bill for payments they received from Norfolk Southern after last year’s derailment.
Other Dems, however, were not quite as impressed.
Rep. Rosa DeLauro (D-Connecticut), a fashion icon and longtime advocate of the expanded child tax credit, is not thrilled with the deal as it stands. She has pushed for returning the credit to what it was in the 2021 American Rescue Plan — $3,600 per child under age 6 and $3,000 per child between 6 to 18 — and she’s also not too fond of the major corporate tax cuts.
“The expanded, monthly Child Tax Credit we passed in the American Rescue Plan provided unprecedented economic security for America’s middle- and working-class families. It lifted four million children out of poverty, cut hunger by over a quarter, and 98 percent of payments were sent successfully. I have said it is our most effective tool against rising costs. The deal that has been announced fails to improve the Child Tax Credit. Millions of children would be left in preventable poverty because of a policy choice, all while giant corporations who do not pay any taxes get a massive tax break,” DeLauro said in a statement.
“We need to extend the Child Tax Credit as we knew it under the American Rescue Plan, the quantifiably successful program that met its goals better than any other policy. The wealth gap continues to widen. Americans are living paycheck to paycheck and have not seen their wages increase in years. It is time to get to work moving policy that will actually improve their lives, not watered down policy for the sake of making a deal. Because of the way this deal is currently structured I am opposed and will vote no should it ever come to the floor for consideration.”
If DeLauro is a hard no, that should give any of us pause. If Elizabeth Warren’s joining her … “‘Wealthy corporations and Republican lawmakers in Congress are holding the poorest children in this country hostage in exchange for billions in tax handouts,’ Elizabeth Warren, the Democratic senator from Massachusetts, told the Guardian in a statement.” Well, that’s more than a pause.
It is also worth noting that the White House has not issued a statement in support of the bill yet either, with a spokesperson suggesting to the Times that Biden, too, is holding out for a better deal on the Child Tax Credit as well.
That’s actually a pretty smart move, seeing as how the bill is still fluid and hasn’t even been voted on yet. I think everyone would agree that it really would be super great and nice if we could get the other Child Tax Credit back, please. The one we know worked and lifted four million kids out of poverty.
PREVIOUSLY:
This part is a load of shit: "The bill will also “incentivize” research and development in some capacity, which people may want to keep in mind vis a vis arguments that pharmaceutical companies need to charge Americans so much money in order to fund their “research and development.”"
The vast majority of pharmaceuticals are invented on university campuses with public funds and then pipelined to the pharma companies for private enrichment.
Same as it ever was in this shithole country.
Speaking of traps, lol.
Nikki Haley Challenges Donald Trump to New Hampshire Debate, Won’t Debate Again Without Him
Oh Nikki, I dislike Trump very very much but I would never try to debate him outside of an officially moderated debate contest because he follows zero rules of conduct. But please proceed. He can embarrass you and disgust more suburban women at the same time.