New bill protects family tax credits from inflation
CV NEWS FEED // Senator Chuck Grassley, R-Iowa, introduced a bill designed to reduce the effects of inflation on middle- and lower-income families.
“Iowa State University released a report showing that inflation led to the equivalent of a 33 percent reduction in rural disposable incomes,” Grassley’s office said in a statement.
In an effort to cushion the blow that inflation has taken on Americans’ budgets, Grassley’s proposal would catalog some of the tax benefits of inflation-adjustment — including tax credits and deductions that benefit parents and students.
The statement explained that the bill, called the Family and Society Inflation Relief Act, “would help parents by adjusting the child tax credit, phase-out thresholds for non-child credit, and inflation-specific credit amounts.” The legislation would likewise set education-related tax benefits to adjust for inflation as well.
Sociologist and analyst Josh McCabe Call Grassley’s suggestion is “great news.” It will “eventually index the child tax credit. This will end the insidious practice of allowing the family’s tax benefits to be eroded by inflation over time.” He said:
Not being indexed has always been the Achilles heel of the child tax credit. To give one clarification: if indexing were included with other changes in 2017, it would be closer to $2,400 per child today (instead of $2,000 currently).
Commentator Ramesh Ponoro added He believes that Grassley’s proposed provisions for linking tax breaks to the realistic effects of inflation “must be permanent”, and the indicator to be “nominal wages”. In other words, rather than indexing (or increasing) the tax credit allowance for inflation, Bonoro argued, one could simply link it to actual labor wages.
“The 40-year high inflation we are seeing today has made it difficult for Americans to afford their trips to the gas station and the grocery store,” Grassley said in a press release issued Thursday.
Combined with my mid-tier savings and investment law, indexing beneficial tax credits for inflation — such as the Child Tax Credit and the Lifelong Learning Credit — will help parents and students keep up with rising costs. While President Biden has failed to produce any meaningful solutions to the economic crisis he has created, I will continue to work on sensible policies that will help Americans cope with this high inflation.
The Catholic Foot’s director of communications, Joshua Mercer, praised Grassley’s bill.
Families are suffering from inflation. Survey after survey has shown that what worries Americans most is inflation and the economy. “We applaud Senator Grassley for providing a logical way to address this central problem,” Mercer said. “There’s no reason why Congress can’t fix this now.”