Trump's tax plans

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One of the most lamentable failures of the repugnant Republican tax plan is the Child Tax Credit proposal. Though the possible expansion of the CTC had been hailed as bipartisan relief for struggling families, this proposal is just one among many that will boost the rich without doing much of anything for the poor. And the conservative reasoning supporting this CTC model is particularly insidious. Expanding the CTC was a pet project of Ivanka Trump, who has long attempted to pass herself off as a champion of women and a moderate voice in her father’s ear, a nonsensical notion in light of her inaction to advocate for the feminist issues she says are important to her. Praising the tax plan, Ivanka said it “takes a big step in terms of helping the American family with the high cost of raising children.” By “the American family,” she meant the wealthy American family.

The current CTC gives up to a $1,000 tax credit for each child in an eligible working family. Similar to the Earned Income Tax Credit in that it’s meant to encourage work (even if work for the impoverished is consistently low-wage and hard to find), the value of the CTC increases as income goes up, begins phasing out at $110,000, and zeroes out at $150,000 (for a married couple). Families with annual incomes under $3,000 receive no CTC, and families who earn between $3,000 and $16,000 receive just a partial credit. It’s partially refundable too—families can receive 15 percent of their incomes over $3,000 back, up to the maximum credit. This feature is extremely important for low-income families, who may earn too little to owe much or any federal income taxes and wouldn’t benefit from just a credit. Without the current CTC, more children would be poor. The CTC was responsible for 1.5 million fewer children in poverty in 2016, and lessened the poverty of another 6.1 million.

But the credit could do so much more. An expansion of the CTC could have eliminated the partial benefit so that poorer families can receive the full credit, and it could have meant expanding the credit to families in deep poverty, like those who earn less than $3,000. Child poverty, though at its lowest rate ever, affects nearly 16 percent of all children. It also could have meant altering the unequal treatment of low-income families regarding their tax refunds—because the CTC is only partially refundable, lower-income families don’t benefit as much as higher-income families. (Currently, since families can only receive a CTC refund equal to 15 percent of their incomes after their first $3,000, a single mother with two children who earns $10,000 a year would only be able to receive $1,050 from the CTC [$525 per child], instead of the maximum $2,000 [$1,000 per child]. Higher-income families would enjoy the full benefit.)

But alas, the Republicans are proposing to expand the CTC in the other direction, so it does an even better job of assisting upper-class families over needier families. For one, the proposal raises the maximum family income needed to be eligible for the credit—in the House’s plan, the tax credit would be available for families making up to $294,000. In the Senate’s bill, which was recently revised, the tax credit would begin phasing out at incomes of $500,000. (The original bill phased out the tax credit at incomes of $1 million.)

The GOP Tax Plan Expands the Child Tax Credit -- for the Wealthy