Tax Reform Is a Trump Family Affair
Ivanka Trump is working with prominent conservatives to push a major increase in the child tax credit.
As President Donald Trump tweets his chiding remarks to a U.S. Congress that has moved its 200-day checklist of accomplishments into a “wish list” of items that may or may not ever happen, it’s pretty obvious: tax reform is a Trump priority and even a family affair.
While the president is consistently on message about both lowering America’s corporate tax rate (the highest among developed nations) and reducing the burden for middle class workers, Ivanka Trump is focused on the role of tax policy to bring relief to working families. She advocates a higher child tax credit to help families dealing with child care — often to the tune of five-figures per year in order to remain employed.
Back in September 2016, candidate Donald Trump began to speak of the policy inspired and driven by his daughter, a working mother of three children. The simplest explanation of the proposal is either a doubling of the child tax credit or to allow dependent care — for up to four children and elderly dependents for individuals earning less than $250,000 — to be deducted from income taxes or a partially refundable tax credit for low-income families.
Ivanka noted last year, “As a society we need to create policies that champion all parents, enabling the American family to thrive.” This statement is so true to recognize the value of families and to understand that removing an obstacle for productive adults to support their families is critical, especially in a world where welfare entitlements are never reformed and easily accessed.
Last week, Ivanka joined Rep. David Schweikert (R-AZ), Sen. Mike Lee (R-UT) and Americans for Tax Reform President Grover Norquist in a panel discussion regarding the plan to pass legislation providing tax credits that offset the cost of dependent care. In the audience of this forum were representatives of several conservative and Christian organizations interested in policies that impact families, including the Faith & Freedom Coalition, Live Action, the Family Research Council, Americans for Prosperity, the National Taxpayers Union, American Enterprise Institute, Focus on the Family, March for Life and the Southern Baptist Convention.
A passionate Ivanka Trump began with opening remarks citing specific statistics that point to the reality of the burden for those who want to raise a family and yet strive to achieve an adequate income to raise that family. Ivanka declared that the current child tax credit of $1,000 should “at least double” with “this administration pushing for the largest child tax credit possible.”
The legislators, Lee and Schweikert, spoke of details of a proposed Child and Dependent Care Tax Credit that would be increased to $2,500 and that would be partially refundable — though at a cost of at least $500 billion in taxpayer funds over 10 years, according to the Tax Policy Center.
Research shows that corporate paid parental leave policies do increase work opportunities and wages while reducing dependence on government benefits like food stamps. However, when government mandates policies within businesses, those mandates cost jobs, just as America witnessed in the change of many jobs from full-time to part-time in response to the mandates of ObamaCare. Instead, the use of tax credits can boost overall wages kept by workers who struggle to remain in the workforce while juggling child and dependent care. These credits would also require that at least one parent be actively employed to qualify, making this a support to workers, not an entitlement.
Norquist noted the unique approach to this tax proposal within the comprehensive reforms for business: “We’ve never had a successful tax reform that was not both pro-growth and pro-family. That’s how we put together a winning coalition to understand why we need to do it. It’s also important to do both of those things as we move forward.”
Politically, this approach balances the impersonal, big-business nature of corporate tax reform to address a day-to-day issue within middle class families. While business analysts clamor for the dramatic impact to our nation’s economy that will result from a corporate tax rollback to President Trump’s proposed rate of 15%, middle class families will certainly see a greater earnings potential for those choosing and able to work.
In light of President Trump’s recent pivot to include Democrat minority leaders Chuck Schumer and Nancy Pelosi in his legislative efforts after the impotence of the Republican House and Senate majorities to lead, a child tax credit would provide cover for Democrat support of an overall tax proposal that was broad, not “just for the rich, greedy corporations.”
The White House has not yet released a detailed proposal of its desired tax reforms, however, President Trump has remained steadfast in his call for both corporate and individual tax cuts that expand the benefit to businesses and workers. Knowing that his base of working class Americans are looking to see tax reforms that benefit them, not some unseen market that always serves corporate interests, Trump and his oldest daughter seem willing to fight the big money protecting corporate lobbying to see this through.
The tension in expanding tax credits is healthy among conservatives who understand that manipulated markets are not free and don’t self-correct. In other words, there are good reasons to be skeptical of the real economic wisdom of Ivanka’s proposal. Yet Trump’s populist appeal is still strong, and increasing the child tax credit would in many ways be a big boost to families.
While specifics are elusive, the fact remains: Money that remains in the family budget is always better spent than money confiscated and redistributed by a bloated, wasteful, distant government.