On July 13th, 2023, the Senate Finance Subcommittee on Taxation and IRS Oversight held a hearing to assess the last 25 years of the Child Tax Credit and discuss future implementation of the credit.
The hearing began with an opening statement from the Chairman and Senator Bennet(D-CA) that called for the expansion of the Child Tax Credit (CTC), while Ranking Member and Senator Thune (R- SD) gave support to the CTC with work requirements. Testimonies were given by Katherine Mitchelmore, Ph.D., Associate Professor, Gerald R. Ford School Of Public Policy University of Michigan Ann Arbor, MI; Indivar Dutta-Gupta, President & Executive Director Center for Law and Social Policy Washington, DC; Kevin Corinth, Ph.D., Senior Fellow, Deputy Director, Center on Opportunity and Social Mobility American Enterprise Institute Washington, DC; Angela Rachidi, Ph.D., Senior Fellow And Rowe Scholar American Enterprise Institute Washington, DC. Dr. Rachidi mentioned that the expanded CTC targets anti-poverty and tax relief, which caused slightly less than 50% of expenditures toward the bottom two quintiles of income and slightly more than 50% of expenditures targeted at middle- and high-income families. Senator Brown(D-OH) asked to explain the cost-benefit analysis of the permanently expanded CTC to Dr. Michelmore and Mr. Dutta-Gupta. Dr. Michelmore explained that the permanently expanded CTC allows kids to have higher earnings in adulthood, reduce health costs in the future, and reduce crime. Mr. Dutta- Gupta explained that the permanently expanded CTC reduces the interaction between Child Protective Services and the Child Welfare System in families, which helps keep families together.
The Child Tax Credit in current law has an overwhelming amount of bipartisan support. In general, arguments over the future implementation of the CTC show that Democrats support the expanded version of the CTC, while Republicans support the Child Tax Credit with work requirements and partial refundability.
By Ellison Olson, Policy Intern