Clinton proposed reforming Child Care Tax Credits (CTC) to provide greater relief for working families and those living poverty, Quartz reports.
As Bloomberg explains, families are currently eligible to receive up to $1000 of income-based CTC benefits per year once they have earned $3000.
In his column at The Week, columnist Ryan Cooper explains how it works:
If you are a single mother with one 2-year-old child making $8,000 in income, and you owe no federal income tax, you can get a credit of $750 (15 percent of $5,000).
Clinton would change this in two ways. First, she would get rid of the $3,000 minimum to claim the credit. Second, for children under 5 years old, she would make the credit phase in at 45 percent of income (instead of 15 percent), and increase the credit to $2,000 per child. That same single mother making $8,000 would instead get a full $2,000 credit (since 45 percent of $8,000 is well over the limit), a dramatic increase.
“Hard-working, middle-class families are struggling with rising costs for child care, health care, care-giving and college,” Clinton said in a news release. “This new tax credit will make their lives a little bit easier and help restore fairness to our economy.”
However, Clinton's proposal has been criticized for not doing enough for families in extreme poverty.
Cooper argues that Clinton's CTC expansion benefits too small a group: working families with children under five.
Cooper asserts that linking these credits to income misunderstands poverty and its relationship to employment.
Many people who lack jobs are willing and eager to work. Even though unemployment rates have lowered in the U.S., the labor force hasn't fully recovered from the 2008 recession, WSJ reports. Research has also shown that the difficulty of finding a job increases the longer a person is jobless, according to the Brookings Institute.
On the progressive public policy organization Demos' blog, writer Matt Bruenig argued that work-incentives are not an effective way to eradicate poverty, because most poor people don't lack incentive, they just lack opportunity.
So what's the alternative?
Cooper argues that CTC benefits should be removed from the tax system and distributed by the Social Security Administration in monthly checks. This would not only include those without jobs, but also could make responsible family budgeting easier because the money wouldn't be given out in one lump sum.
Clinton's plan does have political realism on its side.
"Conservatives like Sens. Marco Rubio and Mike Lee have proposed their own sizable child credit expansions," Slate points out, also noting that tax credits "submerge the safety net in the tax code, where it's less likely to draw attention from angry conservatives."
Clinton's plan is affordable, at an approximate cost of $150 billion to $200 billion over ten years, according to NPR. A review from the Tax Policy Center, a non-partisan think tank, concluded that her proposals would increase revenue by $1.4 trillion within a decade and that tax increases would primarily be shouldered by the wealthiest one percent of Americans.