Yesterday’s statement of principles released by the “Big Six” tax reform negotiators referred to tax relief for “families” no less than four times:

…the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families…


…Above all, the mission of the committees is to protect American jobs and make taxes simpler, fairer, and lower for hard-working American families….


…We have always been in agreement that tax relief for American families should be at the heart of our plan….


…American families are counting on us to deliver historic tax reform. And we will.

The emphasis on families is promising, but light on details. Is it a reference to rate reductions, or tax code simplification, or something else entirely? Ultimately, when 45 percent of households do not file federal taxes, there are only so many ways comprehensive tax reform can directly help the average working family.

Yet just about everyone pays payroll taxes. So that leaves an expansion of the Child Tax Credit (CTC), along the lines of the kind Senator Marco Rubio has long championed. Rubio’s proposal to enhance the CTC includes increasing the maximum credit from $1,000 to $2,500, and making it refundable with respect to payroll taxes. By beginning the CTC’s refundability at the first dollar instead of the current $3,000 threshold, a payroll refundable CTC would reduce the taxes of working families across the board.

While far shy of my preferred policy a true child allowance Rubio’s CTC expansion would be a huge improvement over the status quo. An earlier version of this plan was estimated by the Tax Foundation to increase the after-tax income of the lowest income decile by 44.2 percent, and 55.9 percent with dynamic scoring. The Rubio plan could be improved further by indexing the maximum credit level to wage growth, and ensuring it’s largely paid for by consolidating existing federal programs.

From our research and blog posts, to public presentations and exclusive reporting, the Niskanen Center has been making the conservative and libertarian case for a child allowance for the better part of a year, while pushing a larger and more refundable CTC as a politically achievable compromise. The movement for an expanded CTC culminated last month in a private meeting between lawmakers interested in “pro-family tax reform initiatives,” organized by Ivanka Trump and Senator Marco Rubio, as I first reported on here.

After the meeting, the Daily Mail reported the following:

Rubio is the co-sponsor of a bill in the Senate that would give families a tax credit of $2,500 per child. Ivanka had previously proposed a childcare deduction, but the White House said Tuesday that it was embracing the Rubio plan.


‘Allies on and off the Hill have said that enhancing the child tax credit will best achieve President Trump’s promise to increase working families’ flexibility,’ an official said.


The tax credit will be part of a proposal that the White House’s National Economic Council puts forward, a statement indicated.

Assuming yesterday’s joint statement is indication that the NEC has carried forward its support for Rubio’s CTC expansion into tax reform negotiations, it represents a huge win for advocates of cash-based support for low income families.

The next step is seeing a CTC expansion through to the end. Stay tuned.

Samuel Hammond is a Poverty and Welfare Analyst for the Niskanen Center