The Republican tax plan has been slammed as a giveaway to the rich. But maybe Ivanka Trump can help fix that.
The first daughter is throwing her weight behind a proposal to significantly expand the child tax credit, even as other individual benefits in the code are curtailed or even eliminated. That increase — coupled with a doubling of the standard deduction — is at the heart of Republicans’ argument that the framework they unveiled last month will result in more families paying no taxes.
“This package is completely designed with the middle class in mind,” a senior White House official said.
Democrats and many independent tax experts are already skeptical of that claim. However, they acknowledge that the actual size of the increase in the child tax credit could make all the difference, particularly for single parents with multiple children. But neither the White House nor Ivanka Trump will provide specifics — leaving it up to Capitol Hill to make the numbers work.
“Ivanka wants to see an expansion of the child tax credit as it is an essential part of ensuring a middle-class tax cut,” another White House official said. “She is meeting with members of Congress and advocacy groups to discuss possible proposals.”
Under the Republican framework, single filers would be able to earn up to $12,000 before owing any tax. For couples, that amount is $24,000. Both figures are nearly double the current standard deduction.
But households would no longer be able to claim exemptions for dependents, which total a maximum of $4,000 each. That means parents with more than two children could wind up worse off under the Republican plan, unless the child tax credit can make up the difference.
Currently, the credit is worth up to $1,000 and is refundable, which means even households that do not owe any taxes can still claim the credit. The benefit is also targeted to low- and middle-class families; high-income households do not qualify for it.
Florida Sen. Marco Rubio has been one of the biggest proponents on Capitol Hill of expanding the credit, introducing a bill that would increase it to a fully refundable $2,000. An analysis released by his office last week claimed that would ensure all middle-class families receive a tax cut under the current GOP plan. Without it, some households could be facing as much as a $2,000 tax hike, the report showed.
“Tax reform should focus on addressing the present-day challenges facing working families,” Rubio said in a statement last month. “We look forward to working with the administration and tax-writing committees to ensure that these families are first in line for tax relief.”
Ivanka Trump met with Rubio over the summer to discuss his proposal, and she is perhaps the most influential champion of the measure inside the White House — even briefing her father, President Donald Trump, and Democratic leadership Sen. Chuck Schumer and Rep. Nancy Pelosion the issue during their now infamous Oval Office meeting on the debt ceiling last month.
Ivanka Trump has met with more than 18 lawmakers of both parties, as well as think tanks and business groups, to discuss both the child tax credit and paid family leave, another signature issue. She is holding a dinner Wednesday with members of Congress on these issues and hosting Rubio and his bill co-sponsor, Sen. Mike Lee of Utah, at her home on Oct. 16, according to people familiar with the plans. Her efforts are being coordinated with the White House Office of Legislative Affairs, the National Economic Council and the Treasury Department.
“Ms. Trump has been a valuable ally in fighting for real tax relief for American working families and has been a joy to work with,” a spokesperson for Lee said.
Analysts cautioned that other key details could limit the benefits of expanding the child tax credit. For example, the GOP framework did not specify whether any increase would also be refundable — a critical factor in determining who will benefit from the provision.
Republicans have also been largely mum on whether to keep a separate tax credit that covers child and dependent care. That benefit allows households to exempt up to $6,000 of income, but it is not refundable.
“We certainly support the expansion of the child tax credit, just not at the expense of the child and dependent care tax credit,” said Charlie Joughin, communications director of the First Five Years Fund, a nonprofit focused on early education and whose backers include the Bill & Melinda Gates Foundation and the Buffet Early Childhood Fund.
A White House official said Ivanka Trump supports “maintaining” that credit. A bipartisan bill sponsored by Sens. Angus King and Richard Burr and Reps. Kevin Yoder and Stephanie Murphy calls for increasing the credit to cover as much as half of child care costs and indexing its value to inflation.
“They’re both important. To me it’s not a one or the other,” said Celia Sims, vice president of government relations for Knowledge Universe, which runs day care centers across the country. “They’re complementary credits to each other, but they are distinct from each other.”