In the context of the current presidential election campaign in the United States, one issue is particularly The possible extension of the child allowance is important Both Vice President Kamala Harris and JD Vance, Donald Trump’s running mate, have put forward proposals to change this tax credit, each with different approaches and goals.

The child allowance is a measure that offers financial support to families with small childrenDuring the COVID-19 pandemic, this credit was temporarily increased to $3,600 per child, helping many families better manage basic expenses during a time of significant economic uncertainty.

What the child allowance is and why it is important

According to government figures, this expansion helped lift two million children out of poverty and enable their families to meet basic needs such as food and child care. However, this expansion was short-lived, and by the end of In 2021, the credit was reset to the previous amount of $2,000 per child.Despite the continued increase in the cost of basic goods and services, the child allowance has not yet returned to the level of support it provided during the health crisis.

The economic impact of childcare on families

One of the biggest challenges for families with young children is the high cost of childcareA recent report from KPMG shows that daycare and preschool prices have increased by 263% between 1990 and April 2024. This sharp increase has become a significant burden on family budgets, which is why the child tax credit is even more important to help families cope with these rising costs.

In response to this reality, both Harris and Vance have proposed new measures to expand the CTC, although their approaches and the numbers they propose are very different.

JD Vance’s proposal: an unconstrained income approach

JD Vance has proposed increasing the Child tax credit of $5,000 per childA key element of his plan is to remove income restrictions so that all families, regardless of their income level, can benefit from the credit. This approach is intended to expand the reach of the CTC so that greater assistance can be provided to a greater number of families.

However, Vance’s proposal has sparked a debate as the removal of income restrictions could result in significant costs for the governmenta concern shared by many lawmakers. Despite these concerns, Vance defends his proposal by arguing that broader economic support could positively impact family finances and, in the long run, the nation’s economy.

Kamala Harris’ plan: a targeted and graduated loan

In contrast, Kamala Harris proposes a different approach to expanding the child tax credit. Her plan calls for increasing the tax credit to $6,000 per child in the first year of life and $3,600 annually for the following years. Unlike Vance’s proposalHarris is keeping the current income limits in place, meaning only families with annual incomes of less than $400,000 (for couples) or $200,000 (for individuals) would be eligible for the increased credit.

Harris’ proposal aims to provide more support during the first few years of a child’s life, which are often the most expensive for families due to costs for daycare, diapers and other essentials. This more targeted approach is intended to provide more help to families when they need it most, while keeping program costs under control.

Loan repayment: a key issue for low-income families

A crucial aspect that remains unclear in the proposals of both candidates is the question of whether the child allowance will be refundable. Refundability is critical for low-income families because they often don’t owe enough in taxes to fully benefit from a non-refundable credit. If the credit is refundable, these families could receive a direct payment, significantly increasing the financial assistance they receive.

Both Harris and Vance have left this point open, and their decision on this issue could significantly affect the effectiveness of their proposals, particularly in combating child poverty.

The debate about extending the child allowance

The expansion of the The child tax allowance has been a recurring theme in recent debates in Congress. In fact, the House passed a bill aimed at restoring the credit to pandemic-era levels, but it was blocked in the Senate. Republicans argued the expansion would be too costly, while Democrats pointed out that the measure could lift an additional 400,000 children out of poverty in its first year.

The lack of consensus on the expansion of CTC reflects the ideological and economic differences between the two major political parties in the United States. While some see the expansion of the credit as a necessary investment in the well-being of children, others see it as an unsustainable expenditure for the government.