In his latest budget proposal, President Biden proposes enhancing the Child Tax Credit (CTC) based on the temporary credit that was in effect for 2021 as part of the American Rescue Plan Act. In this report we analyze how that proposal would help children and families.
report March 16, 2023
Effects of President Biden’s Proposal to Expand the Child Tax Credit
blog March 8, 2023
President’s Budget Would Strengthen Medicare Taxes Paid by the Wealthy
As part of his new budget plan, President Biden is asking the richest Americans to pay a little bit more to strengthen Medicare. The proposal includes raising taxes related to Medicare very slightly for the highest earners and closing a loophole that some wealthy individuals use to avoid Medicare taxes altogether.
blog February 13, 2023
Biden Says the Stock Buyback Tax Should Be Higher. Here are Three Reasons Why He’s Right.
A higher tax on stock buybacks would reduce the tax disparity between dividends and buybacks, raise more revenue for productive public investments, and recoup some of Trump’s corporate tax cuts that went to wealthy shareholders.
brief February 13, 2023
Higher Stock Buyback Tax Would Raise Billions by Tightening Loophole for the Wealthy
A higher excise tax rate on buybacks is completely reasonable. Quadrupling the rate, as the President proposes, would raise more revenue and cut into the tax advantage buybacks have over dividends. When a company uses their cash holdings to repurchase their own stock, it is an admission that they have few productive investment opportunities. The public does have productive uses for the tax revenue like infrastructure and schools that create value for the entire economy.
blog January 10, 2023
New House Rules: Low Taxes for the Wealthy on Cruise Control, Tax Credits for Working People Face Roadblock
Two new rules will hamper the new Congress’s ability to pass tax legislation in the next two years. One requires a supermajority for legislation that increases income tax rates, and the other requires cuts to mandatory spending programs—like Medicare, Social Security, veterans’ benefits or unemployment insurance—in exchange for changes to the Child Tax Credit or Earned Income Tax Credit that would mostly help low-income families.
blog December 21, 2022
The European Union Moves Forward on Global Minimum Tax. Time for the U.S. to Follow.
The European Union has reached unanimous agreement to implement a global minimum tax beginning in 2024. With the EU and UK fully on board, it’s time for Congress to follow suit and implement the plan negotiated by the Biden administration. Doing so would improve the corporate tax system here and around the world while making the United States economy stronger and more competitive.
blog December 20, 2022
The Tax Deal That Wasn’t: Congress Decides Corporate Tax Cuts Are Too Expensive if it Means Also Helping Children
Congressional leaders announced their long-awaited omnibus spending package which will fund the government through September 2023. The good news: the bill does not include needless corporate tax giveaways. The bad news: it also leaves out any expansion of the child tax credit.
blog November 3, 2022
Key Republicans Say Negligible Decline in Economic Growth Outweighs Enormous Drop in Child Poverty
The expanded Child Tax Credit reduced child poverty dramatically and immediately. There is no debate or murkiness on this. Some lawmakers have decided that cutting child poverty in half is not worth the cost if it means an ambiguous and negligible decline in GDP growth. This view is not just cruel, it is bad economics.
brief September 20, 2022
How the Inflation Reduction Act’s Tax Reforms Can Help Close the Racial Wealth Gap
Lawmakers have many opportunities to pass reforms that will make our tax code fairer and further reduce racial inequity in our economy. The Inflation Reduction Act is a great step forward; better taxing wealth and income from wealth and expanding targeted refundable tax credits would build on this progress.
blog September 14, 2022
Census Data Shows Need to Make 2021 Child Tax Credit Expansion Permanent
The Child Tax Credit expansion led to a 46 percent decline in childhood poverty. That it could be accomplished during the largest economic disruption in most of our lifetimes underscores a basic fact: thoughtful, decisive government action to combat poverty works.
report September 7, 2022
National and State-by-State Estimates of Two Approaches to Expanding the Child Tax Credit
The Romney Child Tax Credit plan would leave a quarter of children worse off compared to current law and help half as many low-income children as the 2021 expansion of the credit.
blog August 22, 2022
Four Tax Policy Wins in the Inflation Reduction Act and Four More That Can Build on This Progress
With four major tax policy provisions, the IRA takes a huge step toward a fairer tax code and a more equitable economy. But as always, there are more steps lawmakers should take to build on this progress.
blog August 5, 2022
Corporations are Shifting Profits to Wealthy Investors Tax-Free—Stock Buyback Tax Would Change That
Senate Democrats have announced an agreement on the Inflation Reduction Act that, among other changes to a previous version of the bill, would apply a 1 percent tax on corporations repurchasing their own stock. This proposal was included in the House-passed Build Back Better Act last year and was estimated at that time to raise $124 billion over 10 years. This measure would ensure that income transferred from corporations to wealthy shareholders does not continue to escape taxation.
blog January 13, 2022
The Problem with Returning to a $2,000 Non-Refundable Child Tax Credit
Prior to last year, more than one in three children lived in households with incomes too low to receive the full $2,000 credit because it is not fully refundable. This means earnings requirements and other limits reduce the amount tax filers can receive as a refund. In fact, the maximum refundable portion is reduced to $1,400 (less than half of the maximum refundable credit available in 2021).
blog December 17, 2021
Pandemic Policies Demonstrate Government Can Address Widening Economic Inequality If Policymakers So Choose
We are surrounded by evidence that economic inequality is spinning out of control, yet we also see straightforward examples of how government can stop the downward spiral should it choose to do so. The Build Back Better Act, which invests in communities and ensures the wealthy and corporations pay their fair share, is one such example. Congress should pass it.
blog November 18, 2021
Key Reform in Build Back Better Act Would Close Loophole Used by the Rich To Avoid Funding Healthcare
The proposal in the Democrats’ Build Back Better proposal applies the 3.8 percent Net Investment Income Tax to all profit distributions from partnerships and S-corporations so that this income of wealthy pass-through business owners no longer escapes.
blog November 4, 2021
Democrats Seek to Eliminate the Stock Buyback Advantage
An important reform in the bill before Congress would tax stock buybacks in a way that is more comparable to how dividends are taxed. Corporations would be required to pay a tax equal to 1 percent of their stock repurchases, ensuring that profits shifted to shareholders in this way are subject to some federal tax.
brief October 14, 2021
Investment Income and Racial Inequality
Congress has a historic opportunity to fix the way the preferential treatment of investment income widens the racial wealth gap and to strive toward a racially equitable tax code.
blog October 14, 2021
Limiting Tax Breaks for Capital Gains Would Mitigate the Racial Wealth Gap
The racial wealth and income gaps are the results of centuries of government policies favoring the accumulation of wealth among white communities while marginalizing communities of color. Policy solutions that are race-forward, meaning they remedy past and ongoing racial inequities, can also address broader social inequities.
report September 17, 2021
Why Congress Should Reform the Federal Corporate Income Tax
It is reasonable for corporations (and, indirectly, their shareholders) to pay taxes to support the government investments that make their profits possible, such as the highways that facilitate the movement of goods and people, the education and health care systems that provide a productive workforce, the legal system and the protection of property, all of which are vital to commerce. Corporate tax avoidance allows wealthy and powerful individuals to reap enormous benefits from these investments without contributing their fair share to support them.