A New Proposal for Families: Harris’s Newborn Tax Credit
Presidential nominee Kamala Harris has put forth an intriguing proposal that could have a significant impact on low-income families with newborns. The proposal involves permanent expansions to the Earned Income Tax Credit (EITC) and child tax credit (CTC), similar to the changes made under the American Rescue Plan (ARP). Here are the key points to consider:
- Families with newborns could receive a larger CTC, potentially up to $6,000 for their newborn.
- This would be a $2,400 increase from the $3,600 CTC for children under six provided by the ARP.
- The Tax Policy Center (TPC) estimates that these expansions and the newborn credit boost could cost $105 billion in 2025, benefiting low-income families with children by an average of $2,750.
While Harris’s proposal shows promise for helping struggling families, the question remains: Can either presidential candidate effectively combat inflation? TPC’s analysis suggests that neither Harris nor Republican nominee Donald Trump’s plans seem likely to address inflation effectively. Lack of proposals to reduce federal spending or raise sufficient taxes to moderate demand may limit their effectiveness in curbing price increases.
Looking ahead, the Tax Policy Center will be hosting an event to explore lessons learned from the Tax Cuts and Jobs Act of 2017 and the anticipated tax debate post-election. Set to expire next year, the TCJA could lead to tax increases for most American households if Congress fails to act.
In other tax news, the Nebraska Supreme Court recently ruled against a manufacturer’s repatriation income qualifying for a state deduction. Precision Castparts Corp.’s income did not meet the criteria for deduction under Nebraska’s tax laws, adding another layer of complexity to corporate taxation.
On the state level, Colorado lawmakers reached a bipartisan agreement to cut property taxes, saving homeowners and small businesses an estimated $1.6 billion annually. Meanwhile, the Brazilian government is proposing temporary corporate income tax increases until the end of 2025, affecting various sectors including banks and insurance companies.
Stay informed with the latest tax updates by subscribing to the Tax Policy Center’s Daily Deduction. The impact of policy changes on individuals, businesses, and investors will continue to shape the tax landscape leading up to the 2025 debate. Be sure to join the conversation and stay up to date on the evolving tax environment.
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