Child tax credit becomes a hot topic on the campaign trail
DENVER (KDVR) — Families across the U.S. have received a tax benefit for having young children. The topic is back on the main stage as Democrats and Republicans race for the White House.
Democrats have been touting the policy every night at the Democratic National Convention following Vice President Kamala Harris’ proposal to expand the benefit. On the other side of the ticket, JD Vance has proposed his own expansion of the credit.
“When we know that things like child care can run around 25% of a family’s budget, hat child tax credit would really help in adjusting child care costs or diaper costs. Things that are essential for folks with kids,” said Paula Cole, an economics professor at the University of Denver.
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She said it is exciting to see both campaigns talking about a benefit that reduced child poverty by 46% during the pandemic.
“Both of them would offer quite a bit — $3,600 to $5,000 for families would really matter,” Cole said.
Would Congress pass an extended child tax credit?
Harris wants to give families with a newborn a $6,000 credit in the first year of the baby’s life. She also wants to see the return of the $3,600 per child credit issued to families during the pandemic.
Republican vice presidential nominee JD Vance has also proposed an extended child tax credit of $5,000 per child.
Either effort would have to make it through Congress. An effort to get families a $2,000 credit failed earlier this month.
Here in Colorado, experts say families could be okay regardless of what happens nationally thanks to some efforts passed at the state level.
“Knowing that we have a state level child tax credit I think makes a difference for families even if it’s a smaller amount than what’s currently being talked about at the national level. But I think every little bit helps in covering those extra costs,” Cole said.
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Could a bigger credit pass next year? U.S. Sen. Michael Bennet of Colorado, a longtime advocate for child tax credits, said yes.
“I wrote that bill with Sherrod Brown and she and Corey Booker were two of the original cosponsors of that bill,” Bennet said of the expanded child tax credit of 2021. “Joe Biden and Kamala Harris, in their administration, adopted the bill. We cut childhood poverty in America in half. I think our objective being the richest country in the world should be to end childhood poverty. I’m already one of the original sponsors of it, but we’re gonna have the opportunity next year because the Trump tax cuts are going to expire. The Trump tax cuts were hugely beneficial to the wealthy people in America: 65% of the benefits went to the top 5%. Whereas with the child tax credit, 90% of Colorado’s kids benefitted from it.”
Although both proposals could offer families some relief, candidates have not really talked about how they would pay for it. Economists say an expansion could lead to more government spending and may be felt elsewhere in family budgets.
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