Can they get it done?
Tax reform is on the table.
And it can’t come soon enough.
Last month, President Trump promised that his reform plan would “cut taxes for the everyday, hard-working Americans, the people that work so long, so hard, they’ve been forgotten. But they’re not forgotten anymore.”
So what’s a Catholic to think?
A key provision of the current plan is the reduction in the corporate tax rate. The worldwide average corporate tax rate is just under 23%, according to the Tax Foundation, while the U.S. rate is currently 38.91%. This reduction will undoubtedly boost the economy, leading to higher wages and new job growth.
Good stuff for everyone.
But…
Stay with me here. This is very important, but can be confusing…
Early drafts of the tax reform proposal also streamline the code (a good thing) by nearly doubling the standard deduction. But the new tax plan unfortunately eliminates the current deductions for dependent children. Under the current tax code, the dependent deduction allows families to shield up to $4,050 of your dollars from getting taxed for each child.
If this tax break is eliminated, some working families (especially large Catholic families) could actually pay more in taxes. That is — unless legislators increase the amount of the Child Tax Credit. A recent analysis concluded that the only way to avoid a tax increase on middle class families is to increase the Child Tax Credit to at least $2,000.
That’s exactly the fix proposed by Sens. Marco Rubio, R-FL, and Mike Lee, R-UT. They have drafted legislation to double the Child Tax Credit to $2,000 and make it applicable to both income and payroll taxes. For many working class voters, payroll taxes actually takes a bigger chunk of their paycheck than income taxes.
We strongly support the Rubio-Lee plan to double the Child Tax Credit.
Yesterday in Pennsylvania, Ivanka Trump said: “We’re advocating strongly for the expansion of the child tax credit, we think it’s critically important to help offer American families much needed relief and prioritize what’s right for their families. This tax credit enables families to decide what is a right investment for them and their child.”
Ivanka stopped short of a specific amount she thought the tax credit should be expanded.
Doubling the child tax credit to $2,000 or more should be the minimum.
We’re pushing legislators and staff involved in the tax reform process to make this happen.
Families with children are America’s future. And our #1 priority.
Got kids? We have your back.