The child tax credit has become a contentious issue in the presidential election, with both parties vying to appeal to families. Democratic nominee Kamala Harris is focusing on boosting the credit as part of her platform to lower costs for American families, including proposing a $3,600 per child credit and a $6,000 credit for newborns. Meanwhile, GOP nominee JD Vance has suggested increasing the credit to $5,000 per child, highlighting the popularity and populist appeal of such a policy among voters.
The child tax credit was originally approved by a Republican-led Congress and signed into law by President Bill Clinton in 1997. Over the years, the credit has been expanded and made partially refundable for low-income families. However, without further action, the maximum credit and income thresholds will revert back to previous levels in 2026. The credit is widely popular, with almost 90% of families with children claiming it in 2022.
Harris’s proposal to restore the American Rescue Plan enhancement would greatly increase the size of the child tax credit and make it fully refundable for more low-income families. The enhancement introduced in response to the Covid-19 pandemic helped lift millions of children out of poverty but has since returned to pre-pandemic levels. Harris also plans to introduce a $6,000 credit for children in their first year of life. On the other hand, Vance has not released specific details about how he would increase the credit, highlighting the potential cost concerns associated with such a policy change.
Cost has been a key consideration in expanding the child tax credit, with estimates suggesting Harris’s proposal could add $1.2 trillion to federal deficits over the next decade, while Vance’s idea could cost even more. President Trump has expressed support for increasing the credit, but noted that any changes would need to be negotiated in Congress. Despite efforts by Biden and congressional Democrats to extend the 2021 expansion, Senate Republicans recently blocked a bill that would have provided a larger credit to low-income families.
The child tax credit is just one of many individual tax provisions that are set to expire at the end of next year if Congress doesn’t take action. The upcoming presidential election will likely shape the future of the child tax credit and other key policies that impact American families. Both parties are eager to demonstrate their commitment to families and lower-income households through proposals to enhance the child tax credit, but the feasibility and cost implications of such changes remain to be seen.
