How might one improve the child tax credit for very low-income families? TPC’s Elaine Maag discusses the findings of a report she co-authored for the US Partnership on Mobility from Poverty. The Tax Cuts and Jobs Act increases the child tax credit (CTC) to up to $2000 per child under age 17, and up to $500 for other dependents. But 37 million children live in families that won’t get the full CTC because their incomes are too low. The report proposes ways to redesign changes to the CTC so more low-income families with young children could receive the full credit. The changes would mean the families of 16 more children would get the full credit at a cost of about $12 billion annually.
Will Palo Alto, California, get on the soda tax bandwagon? A local dentist started a movement to get the city to levy a tax on distributors of sugary drinks, including soda, smoothies, and energy drinks. Four members of the City Council are on board, and are drafting a memo in support of including such a measure on the November ballot. Officials have not yet determined the tax rate, but they’ll likely follow the lead of California cities like San Francisco, Oakland, and Berkeley.
Speaking of bandwagons. The Job Creators Network, a business group that backs the TCJA, will kick off a “Tax Cuts Work” bus tour in Virginia today. The group plans about 50 events across the country in Republican-leaning districts in advance of the November elections.
And another TCJA cheering section, sort of… International Monetary Fund Managing Director Christine Lagarde says the IMF is “very, very supportive” of the corporate tax cut enacted under the TCJA. She told reporters that the IMF “advocated, recommended, encouraged” the tax cut, and it is one thing “we are very pleased to see happen.” At the same time, she said “We believe that the United States should try to reduce its deficit and try to move its debt downward rather than upward.”
But the EU is still looking to tax US tech companies. The European Union still thinks US-based tech companies are avoiding taxes in member countries, and it is continuing to push for a 3 percent tax on sales in their nations. The Trump administration has strongly opposed the idea, which could raise as much as 5 billion Euro.
The House passed bipartisan IRS legislation this week. The bills aim to modernize the IRS by improving the agency’s customer service, enforcement, and technology. It is not clear whether Congress will fund these new initiatives.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.