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Permanence, Parenting, and Legal Challenges


House Democrats reintroduce bill to make permanent the ARP’s expanded CTC. Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres proposed a permanent extension of the American Rescue Plan’s one-year increase in the Child Tax Credit (CTC) as well as full refundability of the credit. The enhanced credit would be available in the states and US territories. The Biden Administration reportedly is considering a five-year extension to reduce costs and avoid running afoul of budget rules. 

Sen. Hawley proposes a $6,000 tax credit for working parents. Missouri Republican Josh Hawley will introduce the Parent Tax Credit, a fully refundable monthly credit worth an annual $6,000 for single parents and $12,000 for married parents of children under age 13. Single parents must have prior year earnings of at least $7,540, equal to 20 hours of work per week at the federal minimum wage, but there is no income ceiling. Married parents filing jointly face the same earnings threshold, creating an “explicit marriage bonus of 100 percent.” Hawley’s bill also requires filers who claim the credit to include Social Security Numbers of parents and qualifying children.

Washington State passes a new tax on capital gains. Democratic Gov. Jay Inslee will sign the legislation this week. The measure will levy a 7 percent tax on the voluntary sale of stocks, bonds, and other capital assets that earn profits that exceed $250,000 for both individuals and couples. Opponents of the bill say it violates the state’s constitutional ban on an income tax and vow a legal challenge. 

Speaking of legal challenges. A majority of  US Supreme Court justices appeared sympathetic  to a challenge to a California requirement that tax-exempt charities annually report to tax authorities  the names of their large funders—those  who give at least $5,000 or more than 2 percent of total donations. The Americans for Prosperity Foundation, founded by the Koch brothers, argued that the requirement violates the First Amendment right to freedom of association. Supporters say the reporting requirement is the only way tax officials can track abuses by politically-oriented non-profits.

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.



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