GOP Tax Reform Framework Includes Child Tax Credit Expansion
By Devin Simpson
Expanding the Child Tax Credit (CTC) continues to be a top priority for Congressional Republicans, as evidenced by the GOP tax reform framework released yesterday.
The framework proposes increasing the income level at which the CTC begins to phase out, allowing more middle-income families to qualify for the credit. It keeps the first $1,000 of the credit refundable, as under current law, and proposes a $500 nonrefundable credit for non-child dependents.
Despite the nod to the CTC for low- to middle-income families, the framework disproportionately prioritizes tax breaks for higher-income individuals and corporations. After reducing the number of tax brackets from seven to three, the plan would slash the top individual income tax rate from 39.6 to 35 percent, eliminate the estate tax and the Alternative Minimum Tax, and cut the corporate tax rate from 35 to 20 percent.
Using Tax Policy Center data, the Center on Budget and Policy Priorities estimates that the top 1 percent of households would receive “roughly half of the framework’s net tax cuts, or about $150,000 a year on average, and the top 0.1 percent would receive roughly 30 percent of the benefits, or an average of about $800,000 a year.”
To read the full tax framework, click here.