What Now for the Child Tax Credit?

Expanded payments passed through the American Rescue Plan are ending. Can Congress come up with a plan that works for members of both parties?

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For Jeremy and Erin Calcara, parents to five children, the expansion of the child tax credit under the American Rescue Plan has made it easier to pay the bills.

The family lives in Lincoln, Nebraska, where Jeremy works for the state government as a training specialist, and Erin works part-time for an education research project at the University of Nebraska.

“We’re blessed to be able to pay our bills every month, but there isn’t usually much left in the bank account once the bills have been paid,” Jeremy Calcara told The Dispatch. “Especially in these last few months of the year, it’s pretty common for us to be a month or two behind on bills, just paying the minimum possible to try to make it until we get our tax return to get everything back to zero. We haven’t had that problem yet, which has been a nice break from stress.”

The extra money hitting their bank account each month since July has also allowed them to “say yes to getting pizza or picking up tacos after a long day in a way that we usually don’t have,” Calcara added. They also were able to spring for tickets to a couple of Royals games and attend some conferences. And when their dishwasher broke, they were able to pay to have a new one installed.

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  1. Avatar photo
    Ben Connelly

    Wouldn’t it be simpler to just lower the tax burden on families instead of handing cash out with one hand and taking it back with the other?

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    Mike CS

    If we must have one, a CTC should be tied to income like the EITC by requiring someone be legally employed, have legal residency in the U.S., limited to 4 kids, (EITC is 2, require direct deposit, and drop income eligibility levels to only reach people for whom it matters. Having worked doing taxes at a place that does R.A.L.s, I have seen that the parent (and it is usually a single parent) sells the SSNs for those over the filling limit for a piece of the refund. Many who use the EITC end up with $3,000 - $5,000 refunds, pay an annualized (properly disclosed interest rate) of 2-300% to get the refund overnight, then pay $200 to go next door and cash the check. Again, if we must have it, it’s got to be a cleaner, more accountable process.

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    Shane McGuire

    Perhaps these checks should come with a pre-stamped Thank You card. The recipient writes out a heartfelt thank you, which the post office then forwards to someone who pays income taxes. That would have the dual benefit of ensuring the check-receiver knows there are people who actually pay real money for that program, and it would let income-tax payers know that people are thankful and that the money is going to do some good.

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    Johntadian

    Again, this is flat-out welfare, and if it's going to continue (of which I'm opposed), it should be administered by the states. Continued dependency on ever-growing federal largesse is not a path we, as a country, should be encouraging.

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  5. Kurt Von Fuchs

    The child tax credit is great and has seriously reduce poverty. We need to keep our eye on the ball people making over $150,000 a year do not need extra help we should push all the help to the bottom 20%. Unfortunately this is something that no one in Washington seems to understand.

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      JDW

      I think just the opposite. When you keep going to the same people for more taxes but that money keeps going to the bottom 20% is there any money that resentment is rising? I really wonder if I adjusted my income down for all the taxes that pay for these sorts of things and for money I don't get what is my real income. You see more skills and more abilities is supposed to mean you make more.

      I've long thought that one giant tax credit that is given for every hour per week up to 40 for every single American no matter the income followed by a flat tax without deductions would be a system where we all felt like we were in it together. Of course that would eliminate all other social programs. Retirement would be the credit without working. If taxes go up, then we all pay more. If the credit increases then we all get more credit. This ability for voters to vote themselves a pay raise while giving others a pay cut is wrong.

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      1. Kurt Von Fuchs

        I hear you and what you're saying makes sense. My fear is that both parties are now so invested in giving tax breaks and handouts to the middle and upper middle class who don't actually need them

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  6. Avatar photo
    Wilhelm

    Nice work, Harvest! I have no children, so I didn't even know this was a thing.

    With fewer Americans having children, helping those who want to do so strikes me as sensible. This seems like a moment where Biden can show off his bi-partisan chops. In light of his approval numbers, why would he not? To double down on BBB?

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  7. Mark

    People making 400k get welfare? Set the hook and you have them for life. A pizza and tacos? A new dishwasher and conferences? We didn’t have any of those things and you choose to have 5 kids then good luck to you but it isn’t society’s problem. First we dumb down now we take away the shame of accepting hand outs.

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    Jeff Younger

    I’ve always been troubled by the requirements of most assistance programs, which typically discourage socially beneficial behaviors (marriage, working, engaged parenting, etc.), and often have hard cut-offs rather than allowing people to wean off them as they gain their footing in the working world. The CTC is certainly a better use of taxpayer dollars than most of what was in BBB. For the GOP, it would seem a reasonable choice in terms of bipartisan legislation that could move forward, even in an election year (2022). Of course, it would require Biden and Congressional Democrats to work in good faith and not load it up with the obscene levels of non-CTC pork found in BBB.

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  9. Brilliantly Oblivious

    The child credit reminds me of the "Free College" argument. Helping those who are the most needy (no moral judgment intended) often requires far more than a set dollar payment. The most financially needy families need help with health care, anxiety, rent, budgeting, parenting support, transportation etc etc etc. If intact families are financially poor, then the money might very well help them cope. But often poverty has its own set of intractable problems, some caused by poverty, some causing poverty.

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    rlritt

    I haven't read the whole article yet,, but my first thought was if can't afford five children, why would you have five children! My next thought was "why would anyone have five children?"

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