Ideas From The Right: National Review’s Ramesh Ponnuru on Increasing the Child Tax Credit
September 9, 2014Print
The following interview is the latest in our commentary series, “Ideas From The Right: Conservative Approaches to Tax Credits for Working Families.” For this issue, we sat down with Ramesh Ponnuru, senior editor for National Review magazine, Bloomberg View columnist and visiting fellow at the American Enterprise Institute (AEI). Mr. Ponnuru’s responses have been edited for brevity.
In a recent Bloomberg View piece, you suggest that a potential “sweet spot” for Republicans would be a proposal that both lowers the top tax rate and increases the federal Child Tax Credit. Why the focus on that credit in particular?
Raising children is, in no merely metaphorical or sentimental sense, an investment in the future. Federal policy doesn’t recognize that fact. Rather, it includes a large bias against raising children – an implicit tax on that activity, and the Child Tax Credit is a way of counteracting that.
Do you think expanding the Child Tax Credit is a good issue for Republican congressional candidates to run on in 2014?
I do. Expanding the credit is a good idea and it polls very well, particularly among groups that have tended to “resist the charms” of Republican candidates – it does well among women, among Hispanics, among those making $40-70,000 a year.
Per Rep. Jenkins’ Child Tax Credit Improvement Act of 2014 – Do you think the 2009 Child Tax Credit improvements that made the credit available to more lower-income families should be allowed to expire as the credit is expanded for higher-income earners?
My preference would be to make the Child Tax Credit available to anybody who pays either income tax or payroll tax. At the high end, that means making reforms along the lines of the Jenkins bill. I would actually go further – I’d get rid of the income limitations entirely. But at the low end, it should also mean letting the credit offset all payroll taxes, including the share of payroll taxes that employers pay.
There’s been a recent surge in conservative proposals to increase the EITC for workers without children. Are these proposals contradictory to an increased Child Tax Credit or could the two be expanded simultaneously?
I think it would be possible to expand both credits simultaneously. I do think it makes sense to only let people claim one or the other, though. The credits serve different purposes, they have different rationales and they’re targeted to different populations.
What areas of proposals to increase the Child Tax Credit seem to draw the most opposition from conservatives?
Opposition from commentators tends to be centered on two ideas. The first is that the credit represents social engineering – it’s improper favoritism for some behavior over others and some people over others. The second is that it’s a distraction from using the tax code to encourage economic growth.
Do you see opportunities for bipartisan consensus around how to fund a Child Tax Credit increase?
I do, particularly in the way that Senator Mike Lee wants to expand the Child Tax Credit. He wants to pay for it by scaling back tax benefits for higher earners, but not raising their marginal tax rates. That’s a shift in tax policy that should appeal to conservatives and also ought to appeal to progressives because of its distributional effect.