Millions of American families are interested in a concept that has drawn attention in the US presidential contest between Republican Donald Trump and Vice President Kamala Harris. It’s the notion of raising the Child Tax Credit (CTC) to $6,000, a move that may give low- and middle-class families a substantial financial boost.
The goal of Kamala Harris’s idea, which is not the only one under discussion, is to help those who are most in need financially. Currently, each qualifying dependent can get $2,000 from the Child Tax Credit, of which only $1,600 is refundable.
Nevertheless, the amount was briefly raised during the COVID-19 epidemic, reaching $3,600 for each kid under the age of six and $3,000 for each dependent under the age of seventeen. For many families experiencing financial difficulties during the health crisis, this temporary enlargement proved to be quite important.
In this regard, Kamala Harris has suggested both extending the CTC and bringing it back to its previous temporary level. As part of her plan, parents of newborns will receive a credit of up to $6,000 for the first year of the child’s life.
Possible effects on child poverty
Not only does Harris’s plan reduce taxes, but it also aims to fight child poverty. According to the independent Tax Foundation, incentives such as this have the potential to pull millions of children out of poverty and give families a financial safety net during the formative years of their children’s lives.
But putting such a large-scale scheme into action would not be inexpensive. The Tax Foundation has estimated that the cost of an extended CTC, such as the one Harris is recommending, may amount to $1.6 trillion over a ten-year period.
Debate has been triggered regarding the proposal’s long-term effects on the federal budget as well as its financial viability due to its large cost.
The J.D. Vance proposal: An alternative strategy
There are other advocates for the expansion of the Child Tax Credit than Kamala Harris. Another presidential candidate and Trump admirer, Senator J.D. Vance, has put out his own plan. Vance proposes raising the CTC to $5,000, a move that his experts estimate would cost between $2 trillion and $3 trillion over a ten-year period.
In contrast to Harris’s concept, Vance’s scheme would not be dependent on income levels. This implies that the increased credit might help all families, irrespective of their financial status.
Vance claims that his objective is to design a system that provides equal support to all families, irrespective of their financial situation.
Read Also: New Vision for Families: Kamala Harris Proposes $6,000 Child Tax Credit
The implications of these plans for American families
Should one of these suggestions be put into action, American families may be significantly impacted. Families that are having difficulty making ends meet would benefit immediately from an enlarged CTC, especially those with small children.
Furthermore, additional families—including those with incomes so low that they do not pay income taxes—may benefit if the credit is made completely refundable.
If these ideas were to become law, families all around the nation might experience a significant improvement in their financial status. The extra money might assist in meeting the necessities of raising children, which would lessen financial strain and enhance the general well-being of the family.
This is especially crucial for low-income families, who frequently have to make tough decisions about how to meet the needs of their kids.
