Legislation

Pent-up tax demands could resurface in House Democrats’ aid bill

One provision would make the child tax credit fully refundable, increasing it from $2,000 to $3,000 for six years and boosting it to $3,600 for children under 6 years old. The refundable portion of the credit is currently limited to $1,400 for families lacking income to make full use of the credit against taxes owed.

Last year, Ways and Means advanced a bill making the credit fully refundable for two years while increasing it to $3,000 only for children under 4 years of age. The 10-year cost of that measure was scored at $80 billion by the Joint Committee on Taxation.

At six years rather than two, the cost would probably be around $250 billion, and that’s without including the increases in the size of the credit, according to Maya MacGuineas, president of the watchdog group Committee for a Responsible Federal Government.

“With debt set to match the size of the economy this year, we shouldn’t borrow a couple hundred billion dollars extra for a proposal that isn’t directly related to COVID-19 relief,” she said in a statement about the proposed child tax credit expansion.

While the eventual $2 trillion relief bill provided for $1,200 payments to individuals, just $500 was included for each child, meaning the law “counts a child as two-fifths of a person,” Reps. Rosa DeLauro, D-Conn., a senior appropriator, and Suzan DelBene, D-Wash., who sits on Ways and Means, wrote in a letter to congressional leaders Thursday arguing for the boost. They introduced legislation last year that matches what Pelosi included in the House Democrats’ aid proposal.


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