- Hawley rolled out a plan for a new “Parent Tax Credit” on Monday.
- It would distribute $1,000 cash payments to married couples, and slash that in half for singles.
- Experts said the plan contained design flaws that could hurt low-income workers during recessions.
- See more stories on Insider’s business page.
Sen. Josh Hawley introduced a plan for a “Parent Tax Credit” on Monday, aimed at offsetting the high cost of raising a child.
The proposal would establish a new, fully refundable tax credit of $6,000 for singles and $12,000 for couples, meaning families with minuscule or no tax obligations would qualify for a payment.
“Millions of working people want to start a family and would like to care for their children at home, but current policies do not respect these preferences,” Hawley said in a press release. “American families should be supported, no matter how they choose to care for their kids.”
To get the money, households must report earnings of $7,540 for the prior year, an amount equal to 20 hours of work each week at the $7.25 federal minimum wage. The earnings floor is the same regardless of whether a person is married or not, and families do not receive more cash if they have more than one child. Families would sign up for the plan through the IRS.
It was not immediately clear whether the Hawley plan would replace the current child tax credit or be in addition to it. The proposal also did not include a cost estimate for the program. Hawley’s office did not immediately respond to a request for comment.
The current CTC provides up to $2,000 per child, though it leaves out families with small tax bills. Democrats beefed it up in President Joe Biden’s stimulus law to $3,600 per child aged 5 and under, and $3,000 for each kid between 6 and 17. Democrats want keep the program permanently.
Other Republicans have put forward child allowance measures as well. Sen. Mitt Romney of Utah introduced a plan in February to distribute even larger cash payments to parents, paid for with the elimination of some safety net programs.
Patrick Brown, a policy fellow at the conservative-leaning Institute of Family Studies, told Insider that Hawley’s plan appeared to be an attempt at a middle ground between competing GOP childcare plans.
“They’re trying to find a way to say, ‘We want to require work but not screw too many low-income single parents, ” Brown said, though adding “the structure of the CTC still makes more sense to me.”
Seth Hanlon, a tax expert at the liberal-tilting Center for American Progress, told Insider he believed the plan had major design flaws, starting with its earnings threshold.
“That would seem strange if you get nothing if you’re $1 short of that,” Hanlon said. If the Hawley plan was in effect during the pandemic, he said, millions of parents who lost jobs and thus saw their annual incomes fall below $7,540 would have gotten their government aid yanked.
“The number of families benefitting in 2020/2021 would be much lower than other years, which highlights the backwardness,” Hanlon said.
Other Republicans, including Rubio and Lee, slammed the Romney plan as “welfare” after it was unveiled, torching its universal assistance to families as a step that discouraged work.
Brown said he thought the Hawley plan wouldn’t go far among Republicans. “But it does indicate there’s openness to actually not just talking the talk about being a pro-worker party, but actually being willing to invest in that,” he said.
Biden is set to introduce the second part of his infrastructure plan this week with an extension of the monthly child tax credit payments to 2025, The Washington Post reported. The IRS recently said it was on course to start monthly payments of the child tax credit in July.