July 19, 2024

Axne wants child tax-credit expansion permanent

Feenstra, Hinson denounce it as universal basic income

The child tax-credit started in 1997 as a $500, non-refundable tax relief for upper and middle income earners. It has seen several changes over the years, most significantly a temporary expansion in March to provide $3,600 per child under age 6 and $3,000 per child aged 6-17. Prior to this year the credit was $2,000 and only available to families who owed federal income taxes. The benefit phases out for couples making over $150,000 per year.

Democrat Congresswoman Cindy Axne (IA-3) is in Washington this week working on a budget bill, and said in a phone call she’s excited about the expansion.

“This is really, incredibly positive for Iowans because it will impact so many families and so many children in our third district as well as Iowa. I want folks to know that this is a program that they’re most likely going to qualify for. I don’t want folks to think that this isn’t a program they can get into,” Axne said. “Four out of five children in Iowa are in families that qualify for this benefit. So 650,000 Iowa kids will see these benefits. And that equates to about 85% of the children in the third district.”

Axne said the tax-credit will be beneficial to Iowa’s economy and struggling families.

“The average benefit for a family in the third district will be $2,800 and it’s going to 85% of the children. This is going to have a really big impact,” she said. “Not only will it benefit families, this benefits our communities. When our families have money in their pockets to go buy their school supplies to buy an extra pair of shoes for kids are worn out, but they can’t afford it. Now they’re going to be able to go do that. You know that’s going to help our main street in towns across Iowa.”

If no legislative changes are made, the child tax-credit will revert back to a $2,000 credit in 2022, and only be available to those who owe federal income taxes. Axne said she hopes to make the expansion a permanent fixture of the tax code, emphasizing the costs of childcare and other necessities.

“I do want to see this be made permanent. It’s the right thing to do. It’s the smart thing to do,” she said. “I’ve talked to parents who’ve said to me, ‘Cindy, we’re so happy about this. This is going to allow me to buy fresh apples, as opposed to having my kid eat chips.’”

Increases to the child tax-credit became law as part of the $1.9 trillion American Rescue Plan Act, which President Biden signed March 11. Prior to that two of Axne’s Iowa Republican colleagues, Representatives Ashley Hinson (IA-1) and Randy Feenstra (IA-4), unsuccessfully proposed an amendment titled “Stop Harming America’s Working Class.” It would have prevented several provisions of the bill, including the child tax-credit expansion, from taking effect until the Congressional Budget Office provided a detailed report on the impact to private sector jobs and low wage employees.

“The legislation transforms the child tax-credit into a universal basic income for parents at a cost of more than $100 billion. Analysis suggests this would result in 277 million fewer employment hours,” the amendment stated.

Axne said she does not share their concerns about the impact to the national debt or influence on labor market incentives.

“If $3,000 for a child is what it takes to disincentivize people to work, that would mean that our costs to take care of children would be a lot less. It costs on average in this country $250,000 to raise a child in this country,” she said. “If you take that $250,000 divided by 18 it’s a heck of a lot more than $3,000 a year. Families can’t make end’s meet based on this.”

Regarding fiscal concerns, Axne said large corporations are not paying their fair share of the tax burden. She said too much of the tax burden falls on working families because the top one percent of income earners take advantage of tax loopholes unavailable or inaccessible to ordinary people. She said she wants to see a more level playing field.

“We’ve got the richest people in this country literally paying no taxes and then taking a rocket into space. Are you kidding me? While our families in Iowa are trying to figure out how to make end’s meet. Here’s what we need to do. We need to make sure that our families have every opportunity. This is not anything I’m worried about increasing the debt load,” she said. “We have 55 very large companies that pay zero in taxes, big names.”

When asked if she has any plans to run for governor, Axne said nothing is off the table.

“All my options are open at this time. We need a governor who supports our public school system, who wants to support our farming and agriculture community, while also making sure that we’ve got clean water. And who will bring economic viability to our state that brings in good paying jobs,” she said. “I want to support the third district in the best way possible. I’m weighing my decision based on that and where that’s done best, whether it’s at the state or federal level.”