The value of the credit has increased to $2,000 for the 2018 tax year, and the income thresholds at which it phases out have risen tremendously. Effective 2018, the income thresholds for eligibility have increased to:
- $200,000 for single tax filers.
- $400,000 for married couples filing jointly.
This is FANTASTIC news because in the past, the Child Tax Credit was only $1,000, and was only given to those who earned at most $75,000 as an individual and $110,000 as a married couple. For every $1,000 you make over these two income thresholds, the credit gets reduced by $50. In other words, in the past, if you make $130,000 as a married couple or $95,000 as a single person, you no longer get any of the $1,000 tax credit!
Understanding The Child Tax Credit
Let's discuss with the government was so discriminatory before 2018. What does it mean when only married couples making $110,000 or less, or singles earning $75,000 or less can get a full $1,000 tax credit? Logic would dictate the following three reasons:
1) The government only favors middle-to-low income couples who have kids.
Given that the majority of married couples in America make less than $110,000, the government is not as discriminatory as one may think. However, does being less discriminatory mean that you are not discriminatory? Hell no. Let's say you are an Asian American restaurateur who welcomes every single ethnicity into your restaurant except for Caucasian Germans because they remind you of World War II. You are still a damn racist. The government practices socio-economic discrimination which is wrong. Please understand this, even if you may be a beneficiary.
2) The government only wants middle-to-low income people to have kids.
If the government wanted to help people of all income levels, they would extend the tax credit to all people. For some reason, $110,000 is the income maximum which is befuddling. People do realize $110,000 goes a lot farther in Austin than it does in New York City right? What happens when only middle-to-low income people have kids? We create a very non-diverse society that contains even less higher income children.
What happens if you are of very low income, say $15-$25,000 a year and see a government incentive of $1,000 per child dangling in front of you? If you a normal, horny, short-term focused person, you will likely at least consider having several kids. If you have five kids, you get $5,000, which is 20-33% of your entire annual income of $15-25,000! You'll have a nice family, look for more ways to take advantage of the government, and probably think about NOT spending the entire $5,000 on your five kids, but skimming a lot of it for your own use. Can you see the cycle of poverty forming yet?
3) Because kids are expensive, the government wants to help families lessen their cost burden.
If kids are expensive, and you are barely making enough to live a comfortable life and save for your retirement, having a kid, let alone several kids is probably not a good idea. Yet, the government provides mixed messages to the American people by saying we will help you with your child expense, in order for you to have more kids! The world has over 140 million orphans, yet we are encouraging more people to have kids with a $1,000 tax credit?
Let's Get Busy Baby!
There's no doubt in my mind having a family is a beautiful thing, provided your kids are not duds. It's inherent for many of us to want to have children of our own despite overpopulation being the #1 reason for the destruction of our planet. It's our free right to populate the Earth however we please. I just seriously think the government needs to stay out of our personal lives and stop sending wrong signals to the American people. Leave us alone, and let us discover the world for ourselves!
Eradicate the $1,000 tax credit which is discriminatory to the millions of American families who make over $110,000 a year. Instead, raise the adoption credit from $13,360 to $14,360 and encourage more people to think about adoption as a compliment or substitute to raising a family. At least we will be helping five things at the margin: a child in need, a lower income family from detonating their finances, a person or couple whose dream it is to start a family via adoption, taxpayers from having to pay more taxes to fund the irresponsible, and our country's balance sheet!
Related: The Best Age Range To Have A Baby: A Biological And Economic Analysis
Fight on,
Sam
If you don’t earn enough money that you rely on government “incentives”, why do you keep having them? I can understand 1 or 2 kids, but when you have two kids and you’re complaining that you need tax credits, maybe you shouldn’t have a third. By the same token, why in the heck do I have to support people with 5 kids in my real estate taxes. 60-65% of my real estate taxes goes to support schools. If you have more than two kids, you should pony up more and support your own kids.
Interestingly, we find ourselves unable to access the $2000 child tax credit even though we have a son. We adopted him last January when he was just a few days old but he was not issued a SSN. We applied for an ATIN to get the child tax credit since his adoption has not finalized. Full CTC amount of $2000 is not issued to us because he has an ATIN instead of a SSN. Instead, we get $500. So, the government is actually discouraging adoption. I find it fascinating that we pay through the nose to adopt but our child doesn’t count as a full child to the government. As an aside, I do know states that issue SSN to newborns even when they’re adopted but our son’s state does not.
Why do people that put the largest burden on the system get a financial tax break. That is not a sustainable financial model. Stop giving incentives to have kids. This country is drowning under it’s own weight. Plus, I don’t want to pay for your f%^k trphies.
Very interesting article – I agree!
You could make this argument for a lot (maybe all) tax credits/incentives out there and you could make a separate but probably equally valid argument to do away with tax brackets and move to a flat income tax. Here’s the kicker: then we’re destroying jobs and no politician could ever stand for that! Don’t you see that the government’s function is as a job CREATOR (*sarcasm*)?
If taxes were as simple as take how much I made, multiply by .15, write check, send to government then anyone who has passed the sixth grade could do their own taxes! Entire companies (TurboTax, HR Block, etc) would cease to exist (and by the way would pour SOOO much money into lobbying against this). Corporations could suddenly eliminate their entire tax department. Tax accountants? Buh bye! And what about the nearly 100k people who work for the IRS? Well we probably won’t need most of them anymore either.
Get your billions back America!
For additional interesting facts about the IRS: https://www.fool.com/investing/general/2014/02/08/10-incredible-facts-you-probably-didnt-know-about.aspx
I belive this is is place to help people like my family. I work 60 hours a week have 2 children with a third on the way. My wife stays at home to raise our children because we don’t want someone else doing our job. I make 28,000 per year and that is before taxes. People sit here and complain that they dont get a 1000 dollar credit on their taxes per child a year. Boo Hoo…… I could only wish I made 125,000 a year so I didn’t qualify. I bust my ass every day just to put a roof over my childrens head and food on the table. No help from the Federal goverment and no help from the state goverment. So yes I do look forward to every tax credit that is avalible to me. I wish some of the people complaining about this would have to walk a year in my shoes and stay upbeat and positive about everything in life. And no I am not some hillbilly in BFE. I am a college Educated man. Life has given me lemons all along the way and the only think to do at that point is make lemonade…Thank You and God Bless
The sky rocketing national debt began with the eitc and is never going to be under control until the eitc is demolished and the welfare system is given back to the welfare department. The IRS has put the burden of audit upon the preparer and it is a night mare gone bizzerk!! How are we to know who is lying about what kid and who is in the house with the tax payer and the child. The only way to know for sure is to “case the home” and see who is there and who is not. I am tierd and the penalties are astronomical for the filing of a person/s that do not deserve the eitc. When this credit is gone Then the night mare will be over… when everything settles down and the irs has to look for who is not filing once again (not who is filing with false income just to get the eitc) then we will be back to normal with the IRS doing their own auditing.
I know this article is old, but I agree! My husband and I make enough to get no child tax credit at all!! We have 2 children and a 3rd on the way. I will be out on disability soon for the pregnancy and we are getting less than 1/2 my pay b/c of the NJ State disability “max” which causes us to lose over 1200 a month! Even that is not set for normal working people..2/3 of pay is a loss in its on but not as bad as less than half..Once again, if you work your but off to support your family and make sure your children are comfortable you get screwed..who can live off of half an income!!! They are penalizing everyone who works and makes a decent living!! We don’t live beyond our means either!! We have a normal priced house, we drive Mazdas! My husband, served our country to be where he is today, and make sure his family is taken care of..he now still risks his life everyday and works alot of overtime so we can afford the extras like sports, vacation etc. We are saving for retirement but b/c we are maxed out on everything, rising food prices, gas prices… we have a hard time saving for their college!!! We pay so much in taxes to help others but just becuase we max out doesn’t make us rich..he works alot of overtime for us to afford extras!!! It is not fair..if they want to give credits they should make it for all the working class people..we are the ones that deserve a break! We pay all of our taxes…and then some, we pay our medical..we get no help from the government!! I don’t mind helping those in need especially families who lost jobs etc..but what I do mind is helping all those people who don’t want to help themselves and just keep having children and can’t afford them…
Welcome to my site. I think you will enjoy reading many of the posts under the BIG GOVERNMENT category on the right!
Good luck with number #3.
The phase out levels were set in 1997 and were never indexed for inflation. If you are middle income and defer a lot to retirement, like we do, these should not affect you. One year, we had a partial phase out, $50, because my wife and I, despite our best efforts, could not get below the threshold. These efforts included: Maxing out both our 401k’s: $30,000 or so, Maxing out the wife’s health savings account, also pre tax: $6000, making contributions to our health and dental and vision insurance, about $1500 for the entire family. After all these, our income was too high to contribute to a tax deductible IRA, so we had a small $50 phase out. Though I felt I had done all I legally could to avoid it so I was fine with it. We made Roth IRA contributions that year instead, but that was before I started reading the financial Samurai and now I am beginning to question the logic of these contributions. My wife stays at home with our two kids, so I think we will be doing deductible IRA contributions this year (due to one income instead of two) instead of any Roth contributions.
Last year I messed up and we both did Roth contributions, but then again, that is before I started reading the Samurai.
It’s too bad not more things are indexed for cost of living or inflation. AMT is the best example where millions of folks are negatively affected unintentionally. It’s strange the gov’t doesn’t have the might to fix this. But, we know why. It’s b/c tax laws and money = POWER. The more freedom the gov’t gives to its citizens, and the more money they let us keep, the more powerful we become at their expense.
ROTH contributions is not the worst thing in the world. It just feeds the beast to do horrible things, with no promises of giving your money back when it’s time that’s all.
I had to work two jobs last year just to keep my head above water. Then come tax season, they want me to pay in more money to the system. This has been happening for the past few years. I’ m tired of listening to people get free cars, tvs, and other things just from the child tax credit. I have to bust my butt, just to watch other people profit. People keep saying its to help families with their cost, but all i see is more people blowing more money. Its not fair that people can profit off of having kids. Especially, in most cases, its their personal cholice to have kids. I dont get money for my choices. The people who say its not the kids fault, are speaking the truth. But, in reality, its not the kids who are benefiting from the tax credit, its the parents. We are creating a system of dependent people and the cycle will keep going, until someone stops it. I once had someone say that children will pay taxes one day. And I thought about that, and then realized that is not true either. You cant promise that they wont do the same things their parents did, or even prove that they wont end up in jail, which will cost us more money. I know my views are not common or liked, because most people are getting this money. But, if people dont start looking at the bottom line and look at their neighbors and see what it is doing to them; we will be driving the people like me into the ground, to never be able to get back up. I’m not saying that we should get rid of it, but I dont believe in giving so much. Someone has to pay for the money that the government is giving out like candy, and its people like me that are. I dont want to have to pay for things that someone else made the choice to do. People should pay for their own choices.
Thank you for your time.
the government should tax everbody the same and give the same credits no matter if they have chidren or not most lower income families can get enough government assistance as it is and yes i do think if you cant afford them dont have them, yeh oce is an accident the rest are not
Well not all people that get the tax credit ask for a hand out me and my husband make 30,000 a year. We never get an assistants from the government. but the tax credit is nice to put in my daughters savings account for college
If my husband and I made more than 110,00 together annually I would care less if I get or don’t get 1,000 dollars for each kid I have. When you have a family who lives humbly that doesn’t matter. You learn to make it with what you have and the 1,000 dollars that the government gives is nice but it’s not the reason we decide to have kids or not.
The question though is, how do you know? It’s easy to say you wouldn’t mind not getting the $1,000 tax credit when you are getting it. For those who aren’t allowed, they feel discriminated against. Their cost of living to earn that salary is much higher.
Sam, this is a response to your response above: “More and more, I believe becoming wealthy is a choice.”
I believe many people become wealthy due to hard work. I believe just as many (if not more) were born into a situation where they can never become wealthy – or the chance of it is so slim it’s almost negligible. And I absolutely believe some people can never become wealthy. I also believe that a lot of people are lazy and will never become wealthy.
A very wealthy family friend’s son was born a paraplegic and requires round the clock nursing care. He was educated by the best schools, has a supportive family (his medical expenses from the nurses alone are over $10,000 a month, which his parents pay for) and a solid support system. Do I think he’ll ever be wealthy, despite growing up very rich? Nope, not unless he gets an inheritance. He was born paralyzed from the neck down, despite his perfectly functional brain. This man got screwed by the genetic lottery. There’s only one Stephen Hawking in the world.
Similarly, those born with other defects or disabilities never have the chance to become wealthy, save through inheritance or the generosity of others. I went to high school with a girl that was severely dyslexic. She had wealthy parents and a very good upbringing. Amazing person, kind-hearted, very sweet. However, she was terrible at school, because her learning disability was so profound. She tried HARD – she studied more than anyone else I knew. Her grades were terrible and she had an extremely difficult time. It took her many years (I think close to 10) to plod through a 2 year associates degree after high school. She has a low paying job now, but it’s full time, and she’s grateful. She is a dear friend, who can communicate effectively verbally. Her dyslexia prevents her from having basically all office/writing/desk/etc jobs – anything that requires written communication. Again, this woman was screwed by the genetic lottery.
These are two examples from my personal life – people from good (both wealthy and both doted on their children and helped them with their educations) families, who were given every possible help from their support systems. I know of many more in my life. It’s not hard to extrapolate from there.
A lot of people raised in poor situations don’t know there is more to aspire to, or that they have the capacity to work hard and find success. A lot of people raised in poor situations receive sub-par education and no support at home. They have impoverished, absent (often working) or disinterested parents. Few even graduate from high school. The path they must take to become wealthy is MUCH more difficult than most ever face. Do more than a few of those kids really have a chance to get out of poverty? Realistically, I don’t think so. Which is why I have no problem being taxed at a high rate (due to my personal wealth) to help support these people.
However, finding a solution (for people raised in bad situations) to prevent this from happening in the first place would be a much better plan. But I haven’t seen any feasible solutions so far.
I don’t think people should have kids they don’t want or can’t afford, but I can’t think of any ethical way to prevent it from happening. Suitability tests before being able to have a child? I don’t want the government in my personal life. Maybe a financial audit to prove you can support the kid? A good idea, but where do you set the bar?
Being denied welfare unless you’re on birth control (such as depo provera, which is given as a shot in the arm every 3 months – NOT something like the pill, which is daily and you can’t monitor) is the best one I’ve thought of so far, but that puts the burden solely on women which isn’t fair.
We live in a society where we do not let the dying lay in the streets, we give them medical care. A CIVILIZED society. And giving birth to a child you cannot afford (that you intend to keep) is effectively telling this society you expect them to pay your child’s way, because you wanted one. And that’s BS, in my opinion.
Hi,
Many tax benefits phase-out as a taxpayer makes more money. the US has a tax system that is progressive and attempts to ease the burden for the lower income taxpayers so that they do not have to pay their tax bill with money they can use for necessities where as the more money you make the more capable you are of paying your tax bill out of your disposable earnings. Imagine a flat tax, which some people consider fair. if someone makes $10k, they have $1k in taxes and someone making $1,00,000 pays $100k in taxes. Which one is hit worst? Obviously, the guy with $900k left over is in good shape where $1,000 to the low income taxpayer it could really hurt.
Also, I don’t agree the $1,000 child tax credit would deter higher income people from having kids. However, I agree with your stance on the child credit overall. I don’t think having children should be rewarded with a tax credit and although it doesn’t make logical sense to have a kid for the $1,000 tax credit I always hear people that just had a kid mention it. Also, you forgot to mention that the earned income tax credit for low income earners rewards people with children as well and even more drastically. I think overall the government should not encourage people to have more children like this. We have overpopulation already
I think if you can’t afford Kids you shouldn’t have them!!! Don’t get me wrong I like kids just not planning on having my own for the sake of this ONE SINGLE planet we live on. I’m tired of how people think it’s sooo special & a must to make a copy of yourselves & the whole miracle of life ideology. If this were so true we wouldn’t let poor babies get sacraficed (around the world) & we just stand back everyday & let this happen. Bottom line making babies has been done a billion times before nothing really special about it, it just took a sperm & an egg afterall…
i already have to pay for Americans kid. Now i have to pay for kids from Mexico. WTH am i punished for not having kids. I want some of my taxes back. I can’t afford to have kids at this tax rate.
Let’s pay for everybody! :)
Having children is a choice. So why do tax payers have to subsidize someolse’s choices?
Even if you support your children, children cost the government money – schools, medical care, etc.
This is simply pandering to people with children because they are the majority of voters.
I want a tax deduction for my dog!
I want a tax deduction for my rabbit too! Others should support this!
I’m not sure why a credit is given for this at any income level. What exactly does the government get in return for the tax credit? I understand why the government would want to incentives home ownership or religious organizations but I have not clue by there is a credit for having qualifying children under 17. Now on to your comment concerning “Why do you think the government sets the $110,000 and $75,000 income limits for the CTC? What message is the government trying to telegraph?” I think the limits are so low because the government hasn’t recognized that we now live in a dual income society. Sometimes I think the government is anti-marriage.
The government is anti marriage, this is why we have the marriage penalty and $250,000 tax assault on married couples not 200k+200k = 400k! Donno where they got 50k.
IMHO, I think that the government is meddling where it shouldn’t!
As a father that takes the child credit I do it with distaste ever year. Tax credits are not a reason to have children and the government made what I consider a stupid move on that front! Please note, that I’m not a fan of the adoption credit either though. I am a big fan of adopting kids though, but taxpayers should not be paying for this!
In a society where job loss is rampant and unemployment is still at high levels, why are the taxpayers putting up with paying taxes so others can have more kids? It doesn’t make sense now and it didn’t make sense then! Shame on the politicians for introducing this credit and letting it get into the system.
Hi Don, it costs regularly $20-30,000 upfront to adopt a kid. A $13,300 credit to help out the magnanimous person/couple is a positive gesture IMO. The US could do more.
The child tax credit should definitely be ended. Not every family that qualifies agrees with it. Making responsible choices is what needs to happen. If you cannot take care of your children… do not have them. So many young people that have “accidents” would stop at one if their families, instead of government, needed to bail them out, and pay to raise those children. I agree with the statement that children cost more and therefore you should probably pay in more… not less! It is a crazy system that we have. This also goes right in line with the current college financial aid rules. If you have been responsible, worked hard, and only had children you could afford, chances are you will be paying much, much more than those that have many children, work less, and make poor decisions. Yes, I want educated people in America, but the current system is broke and needs to be fixed. People need to be responsible for themselves and their families. Obviously the current systems are NOT working or else we would not be in the financial situation we are in.
Good point about getting screwed for financial aide as a responsible, middle class American! I remember that in high school and my family was scratching our heads when we discovered we did t qualify, yet we didn’t make so much!
If you make $18,000 a year, $1,000 at the margin sounds pretty good to me. If I make $500,000 a year, a $27,000 tax credit also sounds pretty good (same ratio).
I think there are many tax deductions are credits that don’t make since. The government has long used the code to induce citizens to take actions it felt are beneficial to society. Interest on mortgages is deductible to encourage people to purchase homes. While I think that a home-buyer credit may be a better way to influence behavior, I think that credit serves its purpose. I think that this credit helps to alleviate the cost of children, which is a desirable action within society. While the world definitely has many orphans, the U.S. should still give breaks to those who have children. The U.S. is currently below its replacement rate of 2.1, and more than 1/3 of the countries in the world have fertility rates below replacement rate. If it weren’t for the high population of Hispanics, the U.S. would be well below its replacement level.
I think what needs to be done is to encourage births for those families with the means to support them. For example, birth rates in New England are very low. I think there are also still too many people having unwanted childbirths. If you really want to work on resolving the issue of orphans around the world I think that starts with plugging the current flow. Each year there are over 70 million unintended pregnancies, with over 30 million of those being born (not aborted).
There was a time parents got not credit. As I say one should be prepared for the cost. It isn’t the taxpayers job to care for all of them. All citizen need breaks and not just those with kids. Some of us can’t help we are childless.
Too much social engineering imo Will. Having children and the number of children is a very personal matter. IF we are talking about helping families and people out of POVERTY, that’s another matter. But, having many children if you are already in poverty does not help someone get out of poverty.
i have always been for adoption, with or without the tax credit. i don’t think much of the tax law in the way it is. it is what it is. it may have been implemented in a time that made sense then, and to encourage certain behavior(s), or with the legislator’s favoritism and biases. but do those reasons still apply today? i don’t know.
as evident in all preceding comments, i think anytime the government does something, whatever the intention may be, we (the people) will find a way to rationalize it, in both positive and negative forms, with our own personal agendas and biases in mind.
I never knew there was a $13,000 adoption credit until I started doing research on this article. I’m very glad there is one! I plan to publicize this even more! Cheers
Sadly there will always be people that have kids for selfish reasons and those who have children “by accident” who aren’t financially responsible enough to take care of them. So much of the tax code is irrational and beneficial for only a small group of people. Hopefully with more awareness and lobbying we’ll improve the system a little bit at a time.
The government is all about lovely discrimination. The S-Chip tax is economic discrimination against cigar smokers in favor of the Children.
A person should think about the cost of children before having them. It discriminates against the childless by choice or infertile. Is it fair for a married couple with an income of $50000 get an extra $1000 for 4 kids while singles and childless are on unemployment/ ?
The married couple with an income of $50,000 gets an extra $4,000 a year with 4 kids, not $1,000 I believe.
and while the elderly struggle on social security. Why not an elderly tax credit? I beleive the child tax needs a limit of two kids. Most have no more than that anyway. While the child tax is no way is able to cover all the expenses of child, but is still gov money. And guess who it comes from?
Good point on an “elderly credit”. It never ends. But, that’s what Social Security and Medicare is for.
I’d be all for this, but it can’t happen. Not because it’s a bad idea, but because congress uses tax incentives to try to engineer society. To switch to a straight consumption tax would be to give up one of their biggest sources (if not their biggest) of power and control over the taxpayers.
I doubt we have the will to make this radical a change, but I support flat taxes with little to no deductions. This way, everyone is encouraged to earn more, and it puts pressure for higher output and simpler taxes.
Why have a child tax credit at all?
I’d like someone to explain to me why parents – who use additional government services – get to pay LESS taxes than I do. Why don’t they pay additional taxes to support the schools, playgrounds, child protective services and so on that are necessary to raise their spawn?
That’s what I’m thinking too. Either have a tax credit for EVERYONE, so it is non-discriminatory and available for anyone who wants it, or have a child tax credit for no one.
1) Is the CTC discriminatory?
Yes. It makes a distinction between higher income families and lower income families. It then provides a tax credit to lower income families with children to help with the costs.
2) Does the CTC discriminate upper income families from having children?
No. Upper income families have the financial means to meet the needs (and many wants) of that child. The family may need to reprioritize how money is spent, but the higher income family is more equipped to deal with financial woes than a lower income family is.
3) Does the CTC provide a great incentive for lower income families to deliberately have unwanted children?
I don’t think so. I’m sure that there are parents that will have children based on tax incentives, but I also believe that these people are a small minority. My sense is that an overwhelming majority of families that take the CTC for children they wanted or accidently had. In either case, financial resources are required to raise the child, and the CTC helps with that.
4) Should the CTC be removed?
I don’t think so. On the whole, my feeling is that it helps families raise children by providing families with some additional funds. If this can lead to a slight improvement in the quality of the newer generation (and less stress on the families), I think it’s good. Granted, I have no proof of this, but I haven’t seen evidence to the contrary, either.
5) What about adoption?
It’s a complicated, time-consuming process that generally requires thousands (or tens of thousands) of dollars. There’s also the emotional argument for a couple to have their own child. I’m mixed on this one.
Hi Bob, thanks for your thoughts. Regarding point #3, I don’t think many children are accidents. How can you have 3,4, 5 “accidents”? Sex ed is pretty basic don’t you think?
I think I agree with you on this point; the $1,000 tax deduction may be an incentive for a lower SES families to have lots of kids, which is completely ridiculous! In LA, the families with 4+ kids are normally the lower income families that really can’t afford them.
Yes, it could partly be due to culture, but I do wonder how much of the decision is based on monetary incentives. Heck, if you want a large family, why not just adopt – the tax credit for adoption is much more enticing!
P.S. I didn’t know there was a tax credit for adoption by the way. This is good news. Just started researching adopting from China (though it’s still a couple of years off).
Yep, you get ~$13,000 for adoption. The only issue is that adoption usually costs $20,000-$30,000! And, the $13,000 is only one time, whereas the $1,000 is every year until the law changes.
I am pretty sure the $1,000 CTC will not influence couple who make over 110k. If that couple decide to have a child, 1k wouldn’t make any difference.
Maybe the gov’t should change the law to diminish return ie 2nd child gets $800, 3rd child gets $600. Poor people doesn’t need to have 5 kids, it’s way too expensive.
Agreed, but that’s not the argument. For someone making $20,000 a year, a $1000 credit is 5% of their income. That’s very good at the margin. If someone was making $300,000 a year and could get a 5% or $15,000 tax CREDIT every year, that is significant.
In other words, $1,000 to a $20,000/yr could very well be like $15,000 to a $300,000/yr and sway a decision.
The numbers and percentages add up but at the same time the REASON for the extra money for the ones making low income and some next to nothing is to help them out. People making a goos bit of money simply DO NOT NEED the extra money. That is dumb. It shouldnt be about if it’s fair all around, it’s helping out the less fortunate and helping the people in poverty give their children a descent life. Simple as that. It’s not about just giving money to random people just to do it.
We are the ones who buy our own insurance, pay our own copays including the child birth bill that runs my coworkers 5k, we buy our own food, we pay all of our own bills… The families with that little income get all the stuff free… The woman purposely works under 12 hours a week to keep their income low so then they only have to pay 30% of the dads income for rent and/or mortgage (this couple got a free house) they don’t worry about homeowners insurance or property taxes which went up considerably this year to fund these jerks. With all of their needs taken care of the rest of their cash is theirs. We barely make ends meet we need the tax return a lot more than the low income.
These people also get a 2000$ working tax credit for working 12 hours! Wtf is that?
“What happens if you are of very low income, say $15-$25,000 a year and see a government incentive of $1,000 per child dangling in front of you? If you a normal, horny, short-term focused person, you will likely at least consider having several kids. If you have five kids, you get $5,000, which is 20-33% of your entire annual income of $15-25,000! You’ll have a nice family, look for more ways to take advantage of the government…”
Right on the money.
My wife’s works in a lo wincome housing department in our city (section 8). Without fail, probably 95% of the people who receive this assistance are single mothers with 4+ children. They are also receiving a plethora of other governement benefits.
I think this tax credit does increase the cycle of poverty. Not only that, but it seems like poor people just aren’t smart when it comes to sex…they will usually have all the kids by a different dad. Did they not learn the first 3 times?
Interesting viewpoint on one mother having each kid by a different dad. They can’t all be accidents right? That seems illogical. She must have wanted at least the majority of kids no? And the question is, why if they need to rely on Section 8 for housing?
Ok, why is it that a single mother of 3, 4, or 5 kids, has to be some low life hoe with a different baby daddy for each of her kids? What about the moms who work hard, whom were married and after 10yrs the man the father of them kids ha ha just decides he doesn’t want a family anymore, what then? Do we just sterotype because we’re so selfish, ignorant and well I’m just going to put it out there JEALOUS! No thats not very kind nor is it going to solve anything. If you truly believe that a real woman would want to Bring kids into this world only to see them grow up having less than, you are wrong and shame on you… If you sterotype every single mother trying her best to keep her head held high in a society bent on what class or how much money you have, you’re ignorant. . Today over half of Americans are the working poor, and its greed that keeos it this way.
Negativity what a waste:(
@Wojo
It is a refundable tax credit, meaning even if your tax liaiblity is $0, the goverment would pay you $1,000 in cash.
CTC may be used for adopted children as well. The government is subsidizing lower income citizens because they think they should get some assistance. The message is have children and you get a tax break! I think most people do not think that way, but it is a bad message. Is it discriminating if something like 90% are eligible? A number of social programs are then discriminatory, because it is based on income. I guess the mortgage interest deduction is discriminatory, because there is a limit too! CTC and other social programs are supposed to raise their standard of living so the children can compete. I think the intention was to do good, but does it really help the children?
Limiting mortgage interest indebtness to $1.1 mil is arbitrary, and shows the government is sexist bc a couple can’t deduct $2.2 mil of mortgage indebtedness as it stays at $1.1! Pla read
https://www.financialsamurai.com/2010/02/22/the-marriage-penalty-tax-and-sexist-government/
I agree there is a marriage penalty, but the limitation on mortgage interest is an unwillingness to subsidize the rich. Perhaps it should geographically adjusted for the high rent areas of the country, but you still need pretty good cash flow to afford that big of a mortgage.
Yes, but do you not believe everybody has the power to be wealthy if they wanted too? Study hard, work hard, build good relationships with everyone and that individual will likely be wealthy. More and more, I believe becoming wealthy is a choice.
With your Austin/New York example, maybe the Child Tax Credit is incentive for rural areas to have children over urban areas, rather than a rich/poor policy? Although Austin isn’t exactly cheap. $110,000 doesn’t go as far as it used to!
So the real winners here are the South and Midwest, where there is a lower cost of living. The losers are SoCal, Bay Area, the Northwest, and New England.
Yes, if only the Federal Gov’t could adjust for cost of living, that would be so much better.
hmm… interesting view of the situation, I just left a HUGE comment about people making over $100,000.. but I do live in the SOUTH, (deep south) so in essence my comment is shot to hell on account of not taking into considerationt he different costs of living throughout the country. Which now thinking about it has always plaqued my mind. Why would cost of living be considerably different in seperate parts of the U.S. BUT it’s all ran by the same government…
Im convinced…. this gov. is all nuts..
-britters
I think another big gov’t hypocrisy is the making housing affordable program which combats falling house prices. Hello, doesn’t a falling price increase affordability.
What they really want is high housing prices and low monthly payments, in other words- to keep people to be debt slaves forever.
Don’t think too much about the tax code and the behavioral incentives, it will drive you nuts!
Mike – Bingo, ain’t it odd? Yes, falling prices does help affordability if you ain’t an owner. Good point!
Writing things out in a sensible way helps me from going nuts! :)
I think the limits are there because the government wants to provide some help for families on the lower end – unfortunately though, the are discriminating against another group of people and handing money out to other so that they can further their agenda. They want stable “families” in this country, so they help out the people who are/have them. They also give tax credits for being married, but unfortunately if you’re gay, you cant get married (In most places) and in the few you could, I dont think you get the federal tax credit (But dont know for sure).
The government wants men + women to get married, so they give them money to do so. Sure, some may get married either way, but what about homosexuals? They dont deserve any money? It looks like the government is trying to engineer the society that they want with giveaways of money – to people with children and to those interested in getting married.
So, at this point if you want to be fair to other citizens, what do you do? Do you skip having kids and not take the tax break, or do you have kids and not claim them (totally foolish – if someone’s handing out 1,000 bills of course i’m going to take one).
The solution is to get the government out of the game.
Yes indeed! The government needs to stay out of our personal lives and stop trying to engineer ehat they want into us!
The point is the influence at the margin. The $1,000 is a sweetener, not the sole reason of course.
wow with a name like mike hunt… (mycunt) i am not surprised that such a low blow would come out of such a male! Wow
I agree completely. It doesn’t make logical sense to create a new child when there are so many that already need homes. It would be like starting at a freshly cooked meal that no one is going to eat, and then going into the fridge to make your own.
Let’s give people who are adopting children more money.
We are – I saw a story on the internet this morning about a family that adopted 7 children this year and they are getting a $54,000 tax refund.
I’m guessing that we will be giving them even more every year as they already had multiple children and with this large a family – I’m guessing they qualify for lots of government money.
That awesome couple should get $570,000 and not just 57k for that matter. This was the first year they ever got a credit for adoption, and they’ve had their adopted children for years.
Bless them!!
I agree that it’s a little late to start the adoption credit. People who adopt kids, no matter the reason, are taking it upon themselves to raise them, give them a home, and love and care for them like they are biological children of the adoptees. With this being said, I strongly think that whether adopting a child or having a child, either way the responsibility and money that’s being given towards the child’s life is the same. Therefore, the tax credit should be the same.
In regaurds to recieving less tax credit for making more income and visa versa, the amount of income made throughout the year infact should be this way. This is my personal opinion and is not ment to step on anyone’s toes, but the sole reason for the credit was ment to help families in poverty. The government is putting a dollar amount where the phase out begins simply to draw a line between middle/upper (mostly upper) class and lower/poverty class. If Americans making $110,000 + per year are hot headed about recieving $1,000, they need to consider the humanitarian aspect of their personality and examine the real reason for the credit. I’m sure if they were the ones living in poverty due to unfortunate events (because everyone is different and not everyone has the same advantages growing up) they would be looking forward to that time of the year simply so they could purchase a descent pair of shoes for their child or whatever the case may be. People making over $100k a year are fortunate and should be thankful they are instead of scrounging for even more money to put in their bank account.
It’s fat enough!
-britters
With the child tax credit, supposedly the government is trying to help working class families with children. But what are the consequences? They are discriminating against any working family making above $110,000. So in essence, couples earning more than $110,000 are paying to raise not only their kids but the kids in the families getting the credit. You’ve written an article here that I can totally agree with. The government should not give any kind of tax break to ANY group. Everyone should pay the same percentage of tax on their income, no matter what they make. (With zero corporate income tax) Yes, even the low income should pay the same percentage as the wealthy. Everyone in the USA should have the same stake in the game. If you choose to have a kid, thats your choice…why should I have to help pay for it? A tax credit for this and a tax credit for that, whether its a kid or new energy efficient windows, the government should get out of the business of creating false demand. The child tax credit and the corresponding Earned Income Tax Credit should be done away with. The governnment is trying to have a societal influence with the tax code but with questionable results.
Norman, thank you for your thoughts. Tis true, why are childless people or couples supposed to fund those with kids? Shouldnt we pay for our own kids and not burden others? I think we should.
So, if the tax credit is removed in the name of “fairness”, poor and lower-income folks will become poorer if they choose to have kids (or keep the kids they didn’t choose to create), or they will not have children. That is a privilege reserved only for the wealthiest (who also get the other choices).
I don’t think anybody decided to have kids or not have kids due to a $1,000 a year tax credit do you? We should treat people fairly IMO and have the government stay out of trying to dictate who should procreate or not.
Thank u these kind of people don’t cear about the por.thay would rather there kids have everything handed to this ensted of like us work in the sorry under played jobs thay make for us and expect us to have the same opertunitty as thay do.Jesus will be back one day and the rich will have to ancer for there greed to others
Its called you made those choices and you have to deal with it. In order to have a successful economy you have to have the poor be poor. You want to be successful you work your damn ass off quit bitching. If you cant aford kids you dont have them. I am sick and tir ed d of paying for kids that are not mine. I pay taxes and still no refund. Yet the gov can not l ay off their own debts but we have to its a bunch of crap.
I don’t understand why those of us who make over a certain income limit are disqualified from claiming the EIC. Those of us who make over a certain income limit are the ones who pay more out of pocket to care for our children. Clothes, food, health insurance, daycare, preschool, ect. We over the poverty line don’t receive Medicaid, food stamps, daycare vouchers, section 8, WIC, ect. It really gets under my skin thinking about how much money certain people receive for having dependents. If I were to make under 18000 a year with my children I would receive almost 10000 in my tax return, but because I make over 35000 I receive 1000???? How does that make sense? People who make that little amount of money do not have to buy groceries to feed their children, write a check for child care, pay co pays and health insurance…..why are they able to get such a big return. And sadly when people get that large tax return they don’t spend it on their children, they buy cars, tvs, ect. And to top it off they barely pay into taxes. I paid nearly 7000 dollars into the government and I barely get anything back and the people who paid little to no taxes get 20 times the amount? Paying out these large income tax returns don’t get these people off assistance or have them eager to better themselves and earn a better paying job.
You’re an actual idiot! A family earning 80k still qualifies for Medicaid, heating assistance, daycare assistance. Maybe your benefit 60k for a family and they’ll still qualify for food stamps. You seem to think that 35k is a lot of money whereas youd probably qualify for many programs and aicne that seems to be your true concern you should apply. Ooh boy! Someones gonna buy a bootie with their gigantic tax refund lmao I’m sure it’ll be a great vehicle. How pathetically jealous can a person be?
Yes and your kids and you will get it back in Social Security when they pay for your Social Security. Did you think that putting money away which is nothing but an IOU has any value if there’s no one around to repay the ious???
I am curious–is the credit limited to your tax liability or can you actually get a refund if it exceeds your total tax amount? The IRS website talks about an “additional child tax credit” provision, but it’s unclear who qualifies.
Wojo, I hope it doesn’t come down to this where you don’t have to pay any federal taxes AND you get a tax credit of $1,000. This is why my giving formula of avg effective tax rate – your effective tax rate = how much to give would be a good idea. We’ve got to all pitch in!
Isn’t this happening right now? I know for a fact that people who have 0 tax liability (federal) and receive money from the irs because they have children. This is in my opinion why our country is going to $hit. I don’t understand why it isn’t being addressed; what with all the deficits and borrowing going on to continue running the government.
it was 10 years ago when a self employed aquaitence i knew earned 80k without any tax liability. and wife filing separately had a owed taxes on 40k she earned from an employer. GE paid no taxes a few years back almost a billion in profits. Lets see how many of you make a fuss about that. People that don’t have children are a drain on the system, because, wait for it, people are more valuble than money.
You’re an idiot. The only people who should have children are those who can afford to have children. Otherwise, the poor are going to continue to reproduce and drain the system.
Sam,
Most deductions don’t make sense. Take the deduction of mortgage interest for example.
I didn’t understand what you mean when you wrote:
“Let’s say you are an Asian American restaurateur who welcomes every single ethnicity into your restaurant except for Caucasian Germans because they remind you of World War II. ”
Um, hate to say it but if any ethnicity reminds Asians of WW II, it would be the Japanese… After all the Japanese were the ones who made atrocities across Asia in the quest to conquer the land surrounding Japan.
Just sayin’
-Mike
You’re missing the point of the example. You can replace any race with any other race.
Like I said what a low blow! Doesnt surprise me coming from a male… and your name, doesnt sound much better that the pathetic thought of a lousy gain of a grand to act on your horniness…..
It was the bombing of Pearl Habor-USA by the Japanese as allies of Germany, which forced the U.S. to become involved in WWII.