Some well-known Republicans have said they want the child tax credit to be expanded as they get ready to deliver a tax package next year.
That’s where Vice President-elect J.D. Vance is. He brought up the idea of raising the credit from $2,000 to $5,000 per child four months ago.
This week, Missouri Republican Sen. Josh Hawley called for an expansion in the same way, saying that he is following Vance’s lead and wants to give each kid $5,000.
“People who work and have kids voted for President Trump.” “They should get a big tax cut from next year’s tax bill,” Hawley said in a social media post, pointing to how well the president-elect did with voters from middle-income and lower-income groups this year.
So is there a chance that a bigger child tax credit will happen?
“I think it has a chance,” said Lorena Roque, an expert at the Center for Law and Social Policy, an activist group leaning to the left. She said that Hawley has “formed himself as a leader in the Senate” and that she thinks the plan has a 50/50 chance of passing. She also said that the credit might go up by a smaller amount.
Roque told MarketWatch, “It would still be great if they went up to $3,000.” She also said she liked some parts of Hawley’s plan, like the idea of giving the credit in regular payments instead of all at once during tax season. But Roque, who is the acting head of the education, labor, and worker-justice team at her organization, said one thing that worries her about the plan is how the work requirement would be handled.
Robert Rector, an expert at the conservative Heritage Foundation, wouldn’t say how likely he thought the Hawley idea was to pass, but he did say very bad things about the plan itself. He told MarketWatch, “I’m not really interested in the idea of making a much bigger welfare payment system—that’s what this would be—that doesn’t deal with the fundamental problem, which is that marriage is falling out and being punished for it.”
“It’s putting more money into a system that is badly broken and harmful,” he said.
Rector said he would back a bigger child tax credit for people making less than $60,000 a year if other subsidies were cut and the “marriage penalty” in the government’s many aid programs was fixed. He said that the penalty was a loss of perks that comes from a family’s income going up after getting married.
“Let’s say a mother who makes $20,000 a year marries a father who also makes $20,000 a year. That person could lose up to $10,000 in benefits,” said Rector, who is a senior research fellow at Heritage’s Center for Health and Welfare Policy.
As part of the Democrats’ American Rescue Plan Act, the child tax credit paid up to $3,600 per child in 2021. Some of that amount came as monthly payments. For the 2022 tax year, it went back to the $2,000 level. The $2,000 limit was set by the Republicans’ 2017 tax rewrite. If Washington doesn’t do something, the credit will go back to $1,000 after 2025. When it was first made in 1997, the child tax credit was worth $500 per child.
