Ivanka Trump met with Senator Marco Rubio in June to discuss Child Tax Credits as a part of the First Daughter’s efforts to implement pro-family policy. The proposed policy would expand the Child Tax Credit from $1,000 to $2,500 per year, and could very well make it into tax reform plans this fall.
The Child Tax Credit (CTC) is the $1,000 per child allowed to be subtracted from the total amount of taxes one is liable to pay to the Internal Revenue Service (IRS). Depending on one’s income, the tax credit may or may not be fully refundable — meaning that if the tax credit exceeds the amount in taxes owed, the tax filer may receive the excess funds in cash, whereas a non-fully-refundable tax credit goes towards a filer’s taxes up until the taxes owed equal zero.
According to Margot L. Crandall-Hollick of the Congressional Research Service, “The child tax credit was created in 1997 by the Taxpayer Relief Act of 1997 (P.L. 105-34) to help ease the financial burden that families incur when they have children.”
In 2001, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) increased the CTC from $500 to $1,000. In 2009, the American Recovery and Reinvestment Act (ARRA) — also known as President Obama’s stimulus package — decreased the refundability threshold from $10,000 to $3,000, making it easier for working families and working single parents to be able to receive the tax credit. Neither the $1,000 tax credit nor the $3,000 threshold are adjusted for inflation. Increasing the tax credit as inflation occurs ensures that a tax credit policy put in place this year will be able to help families to the same extent 10 years down the road.
While the increase in the tax credit has been made permanent at $1,000 (unless subsequent legislation changes it), the decrease in the refundability threshold has only been extended through the end of 2017. As lawmakers reexamine the policy, it will be important to think about the purpose of the CTC and who it is meant to help.
What is the purpose of the child tax credit?
The Child Tax Credit supports families and helps them to care for their children. It is a way for all citizens — rich or poor, single or married — to support families in their communities, especially low-income families, through public policy. There are many expenses parents have to cover, and the CTC recognizes the cost of raising children and the value of caring for the next generation.
In 2015, the Center on Budget and Policy Priorities (CBPP) found that the Earned Income Tax Credit (EITC) together with the Child Tax Credit lifted 9.8 million people out of poverty and made 22 million people less poor. The same report found that the EITC and CTC lifted 5.1 million children out of poverty and made 8 million children less poor.
Research has also shown that the first two to three years of a child’s life are critical to their development. In light of this research, offering a larger tax credit to parents with children under the age of three would allow parents greater flexibility to spend more time with their children — and to better be able to care for them. Instead of working longer hours to be able to provide for their families, with the financial cushion of the CTC parents can choose to spend more time with their kids. Quality time with caring parents who are active in their children’s lives has been shown to increase opportunities for children later in life.
As Christian citizens, we should be asking not only how we can support families, but how we can support policies that support families, especially the most vulnerable families in our communities. The Center for Public Justice’s Guideline on Family states, “The family is the most basic of human institutions. Government should recognize and protect the family as an essential expression of its responsibility to uphold a just society.” Pro-family policies are truly pro-life policies. They support families’ and their life-giving ability to create a community in which children can flourish and grow to be good citizens. We ought to care about families struggling to support their children, help create opportunities for them to better care for their children, and help them find more time to spend with them.
An expanded CTC would address the issue of inflation and acknowledge both the difficulty and the importance of raising children. It aids parents in their efforts to care for their children, while allowing them to decide how best to take care of them. The policy recognizes that the government cannot and should not raise a child. Parents are able to provide a quality of care the government could never hope to provide, only to incentivize.
While public policies can support families in specific ways, families also have unique needs that government is not designed to meet. Many churches are already active in this role by providing counseling for new parents and resources for them as they begin and continue parenting. This good work cannot be legislated and comes organically from our communities.
One organization, Angel’s Place, seeks to support single parents and their children in Pittsburgh. Angel’s Place provides daycare and learning for children so their parents can go to work or class. The children benefit from familiar care in a safe space, while the parents are able to further their education and support their children. Parents must also volunteer at Angel’s Place and take classes “in parenting, nutrition, child safety, and life skills.” The families that participate not only receive the care and counseling they need, but they join in community with others and support each other.
While organizations like Angel’s Place provide a caring space for vulnerable families, the government has the role and responsibility to ensure policies like the Child Tax Credit that will continue to help vulnerable families. An expanded CTC would allow families to better care for their children whether they use the increased tax credit to provide for higher quality day care, work fewer hours, or purchase more nutritious food. One of policy’s strengths is that it gives parents the freedom to decide how they can best care for their own children. Increasing the credit now and adjusting it for inflation each year ensures that our tax code reflects special care for children and families this year and each year going forward. Not only should we support public policy that affirms the value of families and the important role they play, but we should support community programs that work to help parents provide for their children.
-Emily Fromke is a junior political science student at Wheaton College (IL) where she serves as the Editor in Chief of The Wheaton Record.