Asked during a CNN town hall about whether she would support a recent bipartisan deal in Congress to expand the child tax credit, former South Carolina Gov. Nikki Haley said she would want to “do it across the board and make sure that it’s fair.”
“If you’re gonna do tax credits, do it for everybody,” she said. “Don’t play favorites. Don’t pick winners and losers. That’s not what we do in America.”
Facts First: Haley is mischaracterizing how the child tax credit works. A wide swath of American families are already eligible for and claim the child tax credit. Very low-income and very high-income households don’t qualify. The congressional deal would temporarily enable lower-income families to claim more of the credit.
The child tax credit allows eligible families to reduce their tax liability by up to $2,000 per qualifying child. The agreement calls for increasing the maximum refundable credit for those households who owe little or no income taxes.
Also, many low-income families currently receive the same child tax credit whether they have one or more kids. Under the deal, these households would receive the same credit for each of their children, just as higher-income families already do. These provisions would be in effect for three tax years, from 2023 through 2025.
The proposal would help more than 80% of the 19 million children who receive no credit or a partial one because their families earn too little, according to the left-leaning Center on Budget and Policy Priorities. Once fully in effect in 2025, the provisions would lift at least half a million children out of poverty and improve the financial situation of about 5 million more children who would remain below the poverty line.
Some Democrats and advocates are disappointed with the deal because it wouldn’t expand eligibility for the child tax credit to all lower-income families, as the 2021 American Rescue Plan Act did for one year.