Child tax credit: ‘Significant weaknesses’ cited by nonpartisan report for Romney’s $4,200 proposal

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A U.S. Senate proposal to provide child tax credit payments of up to $4,200 a year has received mixed reviews from at least one public policy group, who called the plan a “welcome development,” but also said it “has significant weaknesses”.

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The proposal, called Family Security Act 2.0, was introduced last month by Sen. Mitt Romney (R-Utah) and co-sponsored by Sen. Richard Burr (RN.C.) and Steve Daines (R-Mont.). Its goal is to create a sustainable monthly child tax credit similar to the expanded CTC that was sent to millions of Americans as part of the US bailout.

As previously reported by GOBankingRates, the Family Security Act 2.0 builds on an earlier Romney proposal by encouraging labor and supporting pregnancy. It would provide parents with $350 per month for each child aged five and under ($4,200 per year) and $250 per month for children aged 6 to 17 ($3,000 per year).

Additionally, expectant parents could earn $700 per month for the last four months of their pregnancy, for a total of $2,800.

Benefits would be limited to a maximum of six children each year, and families would need to earn $10,000 the previous year to qualify for full benefits, The Hill reported. Those earning less than $10,000 a year would receive benefits commensurate with their earnings. For example, a household earning $5,000 a year would get half the maximum child tax credit.

The revenue requirement has drawn criticism in some quarters, including from the Center on Budget and Policy Priorities (CBPP), a nonpartisan research and policy institute.

In a report filed last week, the CBPP said Romney’s proposal would increase the credit for most children in low-income families. However, children from families with no income in a year “would get no credit, while millions of other children from very low-income families would only get partial credit.”

Additionally, low- and middle-income families “would have to pay much of its cost through a major reduction in the Earned Income Tax Credit (EITC) and other offsets, leaving millions of children in a worse off than they would be without the Romney plan. “, says the CBPP report.

The CBPP added that Family Safety Act 2.0 “falls short of the expansion of the bailout — and an earlier version of Senator Romney’s Family Safety Act released last year. – by not making full credit available to families with little or no income, instead it includes an income requirement and phases in the credit as income increases.

The CBPP estimates that about 7 million families earning less than $50,000 would be worse off under the proposed plan than under the current law and would affect about 10 million children. Because of the EITC cuts and head of household status, if the proposed plan were approved, the average family could lose more than $800, The Hill noted.

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Those criticisms aside, the CBPP acknowledged that the proposal “includes significant improvements to the child tax credit over current law and can help create an opening to enact meaningful expansion this year.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work has also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal, and Business North Carolina magazine. He holds a BA in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting has earned him awards from the North Carolina Press Association, Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A North Carolina native who also writes fiction, Vance’s short story “Saint Christopher” placed second in the 2019 Writer’s Digest short story competition. Two of her short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. Her first novel, Voodoo Hideaway, is published in 2021 by Atmosphere Press.