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The child tax credit has become a central topic in U.S. political discussions, especially as the presidential election approaches. Kamala Harris and JD Vance have presented different proposals on how to support families through this credit, sparking a debate over the best way to help parents at a time when the costs of raising children continue to rise.
The proposals from Harris and Vance regarding the child tax credit represent two distinct approaches to supporting American families. While Harris focuses on more targeted support for middle- and low-income families, with income limits and a credit structure that varies based on the child’s age, Vance advocates for a broader credit without income restrictions, which could benefit a wider range of families.
Harris’s proposal: an expanded and more inclusive credit
Kamala Harris, the current Vice President, has proposed a significant expansion of the child tax credit. Her plan includes a $6,000 credit for families with newborns, intended to alleviate the initial expenses that come with welcoming a baby. Additionally, she proposes increasing the credit for older children, offering $3,600 for each child between the ages of 2 and 5, and $3,000 for those older.
This proposal, which would be fully refundable, means that families could receive the money even if they do not owe federal taxes. Harris has emphasized that this plan aims to support families during the early years of their children’s lives, when expenses are typically higher.
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However, Harris’s proposal also sets income limits. Families earning up to $400,000 as a couple or $200,000 as a single filer would be eligible for this expanded credit. The Tax Foundation, a nonpartisan organization, has estimated that this proposal would cost approximately $1.6 trillion over ten years.
Vance’s vision: a broad credit without income limits
On the other hand, JD Vance, the Republican vice-presidential candidate, has proposed a different approach. In a recent interview on “Face the Nation,” Vance expressed his desire to establish a $5,000 child tax credit for each child, although he did not provide specific details on how it would be implemented or whether it would be refundable.
Vance has stated that he does not believe there should be income limits for receiving this credit, which means that both low- and high-income families could benefit. However, this proposal has raised concerns about its economic feasibility. The Committee for a Responsible Federal Budget has estimated that a credit without income limits could cost between $2 trillion and $3 trillion over ten years.
Both Vance and former President Donald Trump have voiced concerns about the low birth rates in the United States and have argued that families should be able to afford to have children without facing unsustainable financial burdens. Vance, in particular, has emphasized the importance of families being able to live on a single income, which he considers crucial for the well-being of households.
Comparison of proposals: what do they mean for families?
The main appeal of Harris’s proposal lies in its focus on full refundability, ensuring that even families with little or no tax liability could receive the necessary financial support. This is particularly important for lower-income households, which are often the most in need of such assistance.
On the other hand, Vance’s proposal might be more appealing to higher-income families, who also face economic challenges but would be excluded from the expanded benefits under Harris’s plan. However, the lack of concrete details on implementation and the high projected cost of Vance’s plan could present significant obstacles.
The Current Child Tax Credit: what it offers and What Changes Could come
The current child tax credit, which is $2,000 per child, was temporarily expanded under the American Rescue Plan Act of 2021, increasing to $3,600 for younger children and $3,000 for older ones. However, this expansion was temporary and is set to revert to the original $2,000 starting in 2026, unless Congress takes further action.
The current credit also includes income limits: $200,000 for single filers and $400,000 for married couples filing jointly. Additionally, to receive the credit, parents must work and earn at least $2,500 annually, which excludes some very low-income families.
If no new legislative decisions are made, the credit will revert to $1,000 per child in 2026, and the maximum age of eligible children will decrease from 17 to 16. These changes were part of the 2018 Tax Cuts and Jobs Act but are scheduled to expire, along with other tax cuts, at the end of 2025.
