, but thanks to a major sticking point — that is, the future of the CTC — lawmakers couldn’t reach a compromise before the session ended. Without any changes to the CTC, the June tax package will likely meet the same fate in a divided Congress.
We can draw lessons from 50 years of Republican efforts to make our tax system more pro-family. Republicans from President Ronald Reagan to Donald Trump spearheaded significant expansions to support families, but unfinished business remains. Past efforts to provide families with full protection against inflation and rising payroll taxes keep falling short before the finish line.
The CTC, on the other hand, has never been indexed. Inflation recently reached a 40-year high, and as a result, the credit lost 25% of its value since Republicans expanded it in 2017. A prudent first step would be to immediatelyand fully reverse its erosion by raising the maximum credit from $2,000 to $2,500 per child.
Still, the credit was ultimately made nonrefundable to make more room for other tax cuts. This version became law as part of the Taxpayer Relief Act of 1997. Subsequent expansions under former Presidents George W. Bush and Trump restored some refundability, making it more accessible to working-class families.