Anika Begay
U.S. Vice President Kamala Harris speaks at an event with U.S. President Joe Biden (not pictured) in Prince George’s County, Maryland, U.S., August 15, 2024.
Elizabeth Frantz | Reuters
Vice President Kamala Harris unveiled an economic plan on Friday that includes an expanded child tax credit, worth up to $6,000 in tax relief for families with newborns.
The Democratic presidential candidate’s plan seeks to restore the expanded child tax credit enacted in the 2021 American Rescue Plan, which capped the credit at $3,600 per child, according to a campaign fact sheet.
The 2021 credit was up to $3,000 or $3,600, depending on the child’s age and family income. Harris’s proposed tax break would increase for low- and moderate-income families for a year after a child is born.
“We will provide $6,000 in tax relief to families during the first year of a child’s life,” Harris said during a policy speech in Raleigh, North Carolina.
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The plan comes less than a week after Senator J.D. Vance of Ohio, President Donald Trump’s former GOP running mate, proposed a $5,000 child tax credit.
A Trump campaign representative told Vscek: “Trump will consider a major expansion of the child tax credit that applies to American families.”
While Harris has followed in President Joe Biden’s footsteps with her proposed expansion of the child tax credit, the $2,400 bonus for newborns is “different and somewhat surprising,” said Kyle Pomerleau, a senior fellow and federal tax expert at the American Enterprise Institute. “To me, it feels very much like a response to J.D. Vance.”
Harris’s campaign did not immediately respond to Vscek’s request for comment.
‘Bipartisan momentum’ for child tax credit
Senate Republicans in early August blocked an expanded child tax credit that passed the House with broad support. However, GOP lawmakers are expected to revisit the measure after the election.
“There is bipartisan momentum behind the expansion of the [child tax credit]” said Andrew Lautz, associate director of the economic policy program at the Bipartisan Policy Center.
There is bipartisan momentum behind the expansion of the [child tax credit].
Andrea Lautz
Associate Director of the Economic Policy Program at the Bipartisan Policy Center
The size of the expansion and the future credit scheme will depend on which party controls the White House and Congress. But the House bill and Senate negotiations could be a starting point, Lautz said.
Expiration of the tax credit for future children
Without congressional action, the maximum child tax credit will drop from $2,000 to $1,000 once Trump’s 2017 tax cuts expire after 2025.
The American Rescue Plan temporarily increased the maximum child tax credit from $2,000 to either $3,000 or $3,600, depending on the age of the child. Families received up to half of that in monthly payments for 2021.
According to a Columbia University analysis, the child poverty rate fell to a record low of 5.2% in 2021, thanks in large part to credit expansion.
If the child tax credit is expanded in the future, Pomerleau does not expect it to be as large as the tax break proposed by Harris or Vance.
Amid the federal budget deficit, lawmakers are already grappling with trillions in expiring tax cuts that, he said, are “prohibitively expensive.”
Expanding the child tax credit to $3,000 or $3,600 could cost about $1.1 trillion over a decade, according to the Committee for a Responsible Federal Budget. Meanwhile, expanding it to $6,000 for newborns could cost $100 billion.
Harris’s campaign fact sheet on the economic plan said she would deliver on her “commitment to fiscal responsibility,” including calling for higher taxes on wealthy Americans and big corporations.
