Objective:
To provide a tax credit for individuals and couples without children, recognizing their reduced demand on publicly funded services like education, child healthcare, and social services, while maintaining fairness in the tax system.
Key Details:
- Eligibility:
- Single Filers without Dependents: Single individuals who do not claim dependents on their tax returns.
- Married Couples Filing Jointly without Dependents: Married couples who do not claim dependents for the tax year.
- Credit Amount:
- Single Filers: Eligible for a tax credit that reflects their reduced use of child-specific public services.
- Married Couples: Eligible for a higher credit than single filers to recognize the joint contributions without benefiting from child-related services.
- Tiered Adjustment for Age:
- The credit amount can increase for older individuals and couples, recognizing that those who have been childless over time contribute less to child-related services. Adjustments could apply starting at age 40.
- Budget Neutrality through Reallocation:
- The policy is designed to be budget-neutral by reallocating resources within the existing tax code:
- Streamlining Existing Deductions: Adjustments could be made to under-utilized tax credits to fund the CHTC.
- Reduction in Administrative Costs: Simplifying tax processes can create savings that fund this credit.
- Encouraging Economic Activity: The credit could stimulate increased consumer spending and savings, potentially offsetting costs through economic growth.
- Equity Without Higher Taxes:
- The CHTC applies equally to all eligible individuals and couples, regardless of income, ensuring that no new taxes are imposed on higher earners while providing relief to childless households.