US Vice President Kamala Harris speaks at an event with US President Joe Biden (not pictured) in Prince George’s County, Maryland, USA, on August 15, 2024.
Elisabeth Franz | Reuters
Vice President Kamala Harris unveiled an economic plan Friday that includes an expanded child tax credit that would provide a total tax cut of up to $6,000 for families with newborns.
The Democratic presidential candidate’s plan seeks to restore a higher child tax credit enacted in 2021 through the American Rescue Plan that provides a credit of up to $1 million. $3,600 per childAccording to the campaign fact sheet:
For 2021, the credit was up to $3,000 or $3,600 depending on the child’s age and family income. Harris’ proposed tax cut would extend the tax credit to low- and moderate-income families for the first year after a child is born.
“I’m going to give families a $6,000 tax cut for the first year of a child’s life,” Governor Harris said in a policy speech in Raleigh, North Carolina.
More information on personal finance:
Vance wants to increase the child tax credit to $5,000. Here’s why that’s going to be hard
The expanded child tax credit failed in the Senate. What it means for families
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The plan was announced less than a week after Sen. J.D. Vance of Ohio, former President Donald Trump’s Republican vice presidential nominee, proposed a $5,000 child tax credit.
A Trump campaign official told CNBC that Trump would consider a significant expansion of the child tax credit for American families.
Harris is following the president’s instructions. In Joe Biden’s Footsteps Her proposed expansion of the child tax credit and a $2,400 bonus for newborns are “unconventional and somewhat surprising,” said Kyle Pomerleau, a senior fellow at the American Enterprise Institute and an expert on federal tax. “To me, it sounds like a response to J.D. Vance.”
The Harris campaign did not immediately respond to CNBC’s request for comment.
‘Bipartisan Momentum’ for Child Tax Credit
Senate Republicans in early August The child tax credit expansion passed the House with broad support, but Republicans are expected to revisit the measure after the election.
“There is bipartisan momentum for expansion. [child tax credit]” said Andrew Lautz, vice director of the economic policy program at the Bipartisan Policy Center.
There is bipartisan momentum for expansion [child tax credit].
Andrew Lautz
Associate Director of the Economic Policy Program at the Bipartisan Policy Center
The size of the expansion and future credit design will depend on which party controls the White House and Congress, but the House-passed bill and Senate negotiations could be a starting point, Lautz said.
Future Child Tax Credit Expiration
Without congressional action, the child tax credit cap would fall from $2,000 to $1,000. President Trump’s 2017 tax cuts are set to expire after 2025.
The American Rescue Plan temporarily increased the child tax credit cap from $2,000 to $3,000 or $3,600, depending on the child’s age. Families received up to half the amount in monthly payments in 2021.
The child poverty rate A record low of 5.2% More students may go to college in 2021, thanks in large part to expanded tax credits, according to a Columbia University analysis.
If there is a future expansion of the child tax credit, Pomerleau doesn’t expect it to be as large as the tax cuts proposed by Harris and Vance.
With the federal budget still in deficit, he said lawmakers are already working on trillions of dollars of “prohibitively expensive” tax cuts that are about to expire.
Expanding the child tax credit to $3,000 or $3,600 would raise an estimated $1.1 trillion over 10 yearsExpanding the benefit to $6,000 for newborns could cost $100 billion, according to the Committee for a Responsible Federal Budget.
Harris’s economic plan outline said she would fulfill her “commitment to fiscal responsibility,” including calling for higher taxes on the wealthy and big corporations.
