Having failed on a third and potentially final attempt to repeal Obamacare, Republicans are now betting they can pull off tax reform. To get the ball rolling, they released an outline in September with some of the bare bones of what they hope to achieve.
The proposals are vague, but one thing is clear: The rich will pay less. That’s accomplished by things like eliminating the estate tax; doing away with the alternative minimum tax, which ensures that the wealthy at least pay something; and reducing the top rate on high incomes.
Despite this regressive morass, there was still some hope that the Republican plan would help the most vulnerable among us: children living in poverty. The rumor had spread that it would make the current child tax credit (CTC)— worth up to $1,000 per child for working parents—much more generous and widely available after Ivanka Trump spent time lobbying for it.
But those hopes faded once the details were out. The GOP plan made only a fuzzy promise to “significantly” increase the CTC, while sticking to current policy on how much is refundable and the rate at which it phases in. Currently, families earning less than $3,000 a year can’t get the child tax credit, and even many who do qualify can’t claim the full amount: It gets phased in at the rate of 15 percent for every $1 they earn. Worse, many parents may see no net benefit from the Republicans’ new and larger CTC because it will be coupled with a pullback in other deductions that benefit them.
Yet progressives and conservatives alike have called for an expansion of the child tax credit that would reach all parents. So it’s baffling that congressional Republicans failed to get on board.
The fundamental idea is simple: Increase the amount of the CTC while making it fully refundable. Hillary Clinton put forward something like that during her presidential run, proposing to double the credit amount for children under 5 and let families qualify with the first dollar of income they earn. That plan would have lifted about 1.5 million people out of poverty and increased incomes for 14.2 million families.