CHN: House Passes Child Tax Credit Bill that Leaves Out the Poor

Despite opposition from several advocacy groups, the House passed (237-173) the Child Tax Credit Improvement Act on Friday, July 25. Advocates opposed the bill’s failure to protect the credit for low-income families with children while expanding the credit to cover families with higher incomes. Specifically, H.R. 4935 failed to make permanent the improvements to the Child Tax Credit that affect low-income families, which are set to expire in 2017. If those improvements are allowed to expire, a full-time worker with two children earning the federal minimum wage will lose $1,725, their entire credit. Additionally, the legislation will deny the Child Tax Credit to millions of low-income children in immigrant families where parents use an Individual Taxpayer Identification Number (ITIN) rather than a Social Security number. About 2 million families with a working immigrant parent would lose the credit for as many as 5.5 million children, 4.5 million of whom are U.S. citizens. Eight out of ten of these families are Latino.
At the same time, H.R. 4935 makes the Child Tax Credit newly available to families with incomes from $150,000 to $205,000 to end the so-called marriage penalty, and indexes the value of the credit for inflation for all but the lowest income families. While the cost of this expansion and indexing is roughly $115 billion over 10 years, cutting the credit for immigrant families takes $25 billion from these families, leaving the net cost of the bill at $90 billion over 10 years. Despite repeated insistence by the House majority that additional spending be offset by cuts to other programs, the $90 billion cost is not paid for.

The White House also opposes the bill and threatened to veto it, saying in a Statement of Administration Policy that the bill “would raise taxes for millions of struggling working families while enacting expensive new tax cuts without offsetting their costs.”

tax policy