On Thursday, President Biden signed the $1.9 trillion COVID-relief bill known as the “American Rescue Pan.” The bill has rightly been criticized as a “blue state bailout” and leaves out key pro-life provisions. It allocates $390 million simply to carry out the administrative costs of the legislation, while less than 9 percent of the $1.9 trillion will be going toward directly addressing COVID-19 through public health spending. One bright spot in an otherwise terrible bill is the expansion of the Child Tax Credit (CTC), a change that will benefit millions of families by helping them to prioritize their children.
This temporary change will expand the CTC from $2,000 annually to $3,000 per child between the ages of 6 and 17 and $3,600 per child under the age of six during the 2021 tax year. This will be a fully refundable tax credit, meaning that if the credit exceeds the amount of taxes owed, families will receive a refund.
Increasing the CTC enables families to shift their focus toward the needs of their children instead of focusing on keeping both parents in the workforce, encouraging more quality family time by reducing financial strain. As Lyman Stone from Institute for Family Studies has pointed out, “The reality is that if a person has to choose between driving an Uber or taking care of their four-year-old, society and that child is probably better off with a little more parent-child time and a little less time at work.”
The full tax credit will be available for individuals who make up to $75,000 per year and couples who make up to $150,000 per year. For individuals and couples who make more than that, the credit will be reduced by $50 for every $1,000 of adjusted gross income earned.
As Hugh Hewitt notes, parents can also use this money to invest in private or home schooling. Changing from a two earner household to a one earner household with one parent devoted full time to caring and educating children is a radical - radically positive - change that would yield great results for many American families.
Although the American Rescue Plan is bad legislation and an example of reckless government spending, the expansion of the Child Tax Credit is the one bit of good news in this bill. A strong society is built by strong families, and our tax system ought to reflect that fact. Expanding the CTC is a step in that direction.
(Image: Flickr, Army Medicine, CC BY 2.0)