Both major political parties advocate for a $5K+ child tax credit as the US birth rate plummets
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Baby bump… POTUS candidate Kamala Harris proposed that American families with kids be given up to $6K in tax breaks, up from the current $2K. Families with newborns would receive the max amount of $6K in their child’s first year. After that, Harris’ plan would restore a pandemic-era policy that allotted families up to $3.6K in breaks per child (with the amount depending on the family’s income ). Meanwhile, Donald Trump’s running mate, JD Vance, floated a $5K child tax credit that isn’t income-adjusted, saying “President Trump has been on the record for a long time supporting a bigger child tax credit.”
If nothing changes, the max child tax credit is set to be halved to $1K next year.
Pandemic baby boost… we hardly knew ya. Last year, the US birth rate dropped to its lowest level since the CDC started tracking it in 1979, and nearly a fifth of childless adults under age 50 told Pew Research they didn’t plan on having kids for financial reasons. Each child costs middle-income families an average of $310K to raise to adulthood, a Brookings analysis based on kids born in 2015 found. A tax credit could lighten the load: while the pandemic’s boosted tax break was in place, the child-poverty rate fell by half to a historic low.
Agreement ≠ action… On the election trail, both parties’ candidates seem to support boosting the child tax credit. But Congress recently knocked down a proposal to expand the credit. The federal budget deficit is already massive, and it’s estimated a $3K to $3.6K tax break would cost $1.1T over the next decade (and a $6K newborn bonus would tack on $100B). Still, a dropping birth rate could hit harder, slowing the US’s economic growth and hamstringing public programs like Social Security.