Detroit Regional Chamber > Advocacy > James Introduces Bill in US House to Raise Child Tax Credit

James Introduces Bill in US House to Raise Child Tax Credit

July 14, 2023

The Detroit News
July 12, 2023
Riley Beggin

Washington — U.S. Rep. John James, R-Shelby Township, introduced a bill Monday that would increase the child tax credit to at least $3,500 and would create new tax credits for people working in “critical” professions.

The bill, co-sponsored by Reps. Lori Chavez-DeRemer, R-Ore., and Juan Ciscomani, R-Ariz., would raise the child tax credit from $2,000 annually to $3,500 for each child, or $4,500 for children under the age of six. The full credit would be limited to people who make less than $200,000 a year (or $400,000 if filing jointly).

The legislation would also create a temporary, 3-year tax credit worth $3,500 for healthcare workers, law enforcement officers, members of rescue squads or ambulance crews, firefighters, child care providers and personal care aides working primarily in federally-designated low-income communities called opportunity zones. There are 288 opportunity zones in Michigan.

“This is to help folks who I believe are the foundation of our society. What do we need most? We need healthcare, we need public safety, and we need to support our parents,” James said in an interview with The Detroit News. “There’s so many people who I’ve talked to in my district who are so disenchanted with the government and they wonder if anybody’s working for them, if anybody cares. Well, I care.”

Both credits would subtract from what an individual owes the federal government at the end of the tax year, rather than a refundable credit. During the pandemic, Congress approved a temporary higher child tax credit that was refundable, which allowed families to get the full credit even if they make so little they don’t owe any federal income tax. Tens of millions of Americans have low enough incomes they do not pay federal income tax, or around 40% of households in 2022.

That has been the crux of the debate over expanding the child tax credit in Congress, with Democrats pushing for an extension of the pandemic-era credits that can go to parents even if they don’t have a job and with Republicans arguing those proposals discourage work and increase dependence on the government.

James said his tax credits are intended to go “to the people who desperately need relief, and who are working and are earning a bit of that relief.” It is similar to one proposed by GOP Sen. Marco Rubio of Florida.

The focus on opportunity zones for the professional credit — which are home to around 889,000 Michiganians, according to state estimates — is a “first step” that keeps the bill narrow enough to give it a chance of passing in a tightly-partisan Congress while focusing on the greatest-need areas, James said.

Expanding the child tax credit has been a point of debate in Congress for more than a year since the pandemic-era expansion expired. Democrats and Republicans have split on whether parents must be employed in order to benefit, which has prevented significant legislation from either side from progressing in the narrowly GOP-controlled House and Democrat-controlled Senate.

RELATED: Chamber Announces Support for Michigan Earned Income Tax Credit Expansion