In Module 8, we discussed the Child Tax Credit, which currently grants taxpayers a partially refundable tax credit of $2,000 for each of their qualifying child dependents under age 17 and $500 for each of their other dependents. This credit was first introduced in 1997, but it has been altered and expanded in a bipartisan manner since 2001. Initially, the child tax credit began to phase out for families earning over $110,000 in adjusted gross income ($75,000 for single taxpayers). However, the Tax Cut and Jobs Act of 2017 both doubled the size of the credit and increased the phase-out amount from $110,000 to $400,000 for married taxpayers ($75,000 to $200,000 for single taxpayers). In 2020, Congress approximately doubled the size of the Child Tax Credit again (there was no accompanying change to the phase-out) temporarily to alleviate financial difficulties brought on by the COVID pandemic. The temporary expansion expired in 2023, bringing the amount of the credit back to 2019 levels. This coincided with a spike in child poverty rates from under 6% in 2022 to over 12% in 2023. Prominent politicians from both parties supported making the expansion of the Child Tax Credit permanent, but, at an estimated cost of $1.6 Trillion, they were unable to secure other forms of tax increases to fund the credits expansion. Discuss the ethical considerations of the Child Tax Credit, such as whether the structure of the credit is fair, the effect of the credit on poverty levels, and the efficiency of the credit (the cost to taxpayers of achieving the policy goal, in this case, a reduction in child poverty). Try to think of the effects on different types of taxpayers when justifying your answer.

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The Child Tax Credit CTC is a complex issue with various ethical considerations to weigh On one hand ... View the full answer