TPC Estimates the Benefits of a Newborn Tax Credit
Harris’s proposed newborn tax credits could be worth it with sound administration. Margot Crandall Hollick, TPC’s Margot cranedall-hollick, examines a proposal made by Democratic presidential candidate Kamala Harris. Harris has called for an increase in the Child Tax Credit for families with new borns as part of permanent expansions for the Earned Income Tax Credit and Child Tax Credit. This is similar to the temporary changes made under the American Rescue Plan. Parents who qualify could receive up to $6,000, which is a $2.400 increase over the $3.600 CTC offered by ARP for children under six years old. TPC estimates that the expansions and new credit boost will cost $105 billion by 2025. This will provide low-income families an additional $2,750 in average. It’s unlikely. Howard Gleckman, TPC’s Howard Gleckman, reports on whether the plans proposed by Harris and Republican Presidential nominee Donald Trump can help reduce inflation. Neither looks promising on paper, with a lack of proposals to reduce federal spending or raise taxes sufficiently to moderate demand and curb price increases.Join TPC for an event on the Tax Cuts and Jobs Act of 2017: Lessons learned and the debate ahead.
The TCJA will expire at the end next year. This will set up a major debate on taxes after the election. If Congress does not act, taxes will rise for nearly all American households. On Thursday, September 12, TPC, the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution, and the Journal of Economic Perspectives will host five authors of recent papers to discuss the impact of TCJA on investors, businesses, and individuals heading into the 2025 debate. Join in person or online.Nebraska high court says a manufacturer’s repatriation income does not qualify for state deduction. TaxNotes (paywall) reports on the Nebraska Supreme Court’s decision. The court ruled that Precision Castparts Corp. repatriation income was not eligible for the state’s deduction for “foreign income received” based on Internal Revenue Code Section 965. Colorado state lawmakers have reached a deal to reduce property taxes. Last week, the state legislature ended a special session by passing a bill which will save Coloradans hundreds per year in property tax. The bipartisan agreement calls for the removal two ballot measures which would have led to deeper tax cuts. CBS News Colorado reports that the deal saves homeowners and small business owners about $1.6 billion per year. The Brazilian government proposes an increase in corporate income tax. The government has submitted bills to temporarily increase tax rates until the end of 2025. Banks would be taxed at a rate of 22 percent instead of the current level 20 percent. The tax rate for private insurance companies, capitalization companies and brokerages will increase from 15 to 16 percent. Other companies’ rates will rise from 9 to 10 percent. Rates will return to their current levels in January 2026.
The Daily Deduction resumes its regular schedule Monday, September 9.For all the latest tax news subscribe to the Tax Policy Center Daily Deduction. Sign up to receive it in your inbox every weekday at 8 am (except Mondays when Congress is on recess). We welcome any tips about new research or news. Email Renu Zaretsky
