In the National Review, Brandon Arnold and I defended CEA Chairman Kevin Hassett’s criticisms of the Tax Policy Center (TPC)’s analysis. In my view, the TPC was premature in its analysis and made assumptions that cast the entire idea of tax reform in partisan terms. In contrast, the Upshot Blog at the New York Times has analysis up today that not only admits that there is much we don’t know, but also creates several extremely useful simulations about how choices yet to be made would affect the ultimate distribution of the tax burden.
In particular, they consider reforms to the Child Tax Credit:
There are other ways to make the child tax credit more generous to these families. If the credit were fully refundable, or applicable against both income and payroll taxes — which virtually every working person pays regardless of income — more families would benefit.
There have been several plans over the years to do exactly that with the child tax credit, from both Republicans and Democrats. Below we model an idea based on a 2015 proposal from Senators Marco Rubio and Mike Lee, though it may not reflect their latest thinking. The Rubio-Lee proposal called for an additional $2,500 per child tax credit that would not be refundable but could be used to offset both income and payroll tax liability.
The charts they provide are truly informative and work together as package. Consequently, I can’t take a really good snippet, and strongly encourage you to read the whole post.