Congressman Jason Smith (R-Missouri) should be applauded for his recent pro-taxpayer legislation, HR 1380, the Permanent Tax Relief for Working Families Act. This legislation would make permanent the doubled Child Tax Credit of $2,000 per child and the $500 dependent credit established in the 2017 Tax Cuts and Jobs Act (TCJA).
American families have seen significant tax reductions due to the Trump-Republican expansion of the child tax credit as noted in IRS 2018 Statistics of Income (SOI) data:
- In 2017, 22 million households earning $200,000 or less took the child tax credit. These households received an average tax credit of $1,213.
- In 2018, 36 million households earning $200,000 or less took the child and other dependent tax credit. These households received an average credit of $2,002.
- In 2017, 16.6 million households earning between $25,000 and $100,000 took the child tax credit. These households received an average tax credit of $1,271.
- In 2018, 23.3 million households earning between $25,000 and $100,000 took the child and other dependent tax credit. These households received an average tax credit of $1,912.
Middle class American families saw the biggest tax cut from the TCJA.
Americans with incomes between $50,000 and $100,000 saw their tax liability drop by an average of 13 percent, twice as much as Americans with income above $1 million, who saw their tax liability drop by an average of 5.8 percent.
In Rep. Smith’s 8th District of Missouri, his constituents benefited from the expanded Child Tax Credit.
- In 2017, 48,490 households in the 8th District of Missouri earning $200,000 or less took the child tax credit. These households received and average tax credit of $1,244.
- In 2018, 72,170 households in the 8th District of Missouri earning $200,000 or less took the child tax credit. These households received and average tax credit of $1,996.
- In 2017, 38,730 households in the 8th District of Missouri earning between $25,000 and $100,000 took the child tax credit. These households received an average tax credit of $1,309.
- In 2018, 51, 260 households in the 8th District of Missouri earning between $25,000 and $100,000 took the child tax credit. These households received an average tax credit of $1,989.
Without any action from Congress, the Child Tax Credit will decrease from $2,000 to $1,000 after 2025. If Members of Congress are serious about providing relief for working parents, they should support the Permanent Tax Relief for Working Families Act.