In Kamala Harris’s Call for $6,000 Child Tax Credit for Newborns, It’s Not Just Entrepreneurial Parents Who Would Benefit

Good news for any entrepreneurs with kids and founders who cater to parents more generally: Kamala Harris wants to up the ante on the child tax credit.

During a campaign stop on Friday, the Vice President vowed to help the millions of Americans with children keep more of their paycheck by restoring the expanded child tax credit, which has been a priority for Democrats in Washington, and also bolstering the cut for new parents.

“We will provide $6,000 in tax relief to families during the first year of a child’s life,” Harris said during an economic policy speech in Raleigh, North Carolina. “That is a vital, vital year of critical development of a child, and the cost can really add up, especially for young parents.”

This plan would bring families a hefty dose of tax relief–even more than they received during the height of the pandemic stimulus programs. The American Rescue Plan Act, which passed in 2021, increased the child tax credit to $3,600 for children under the age of six and $3,000 for all other dependents under the age of 18. The credit also became fully refundable, allowing low-income households to take full advantage of the cut.

As a policy, the expanded child tax credit was effective in a short span of time. The measure lifted 2.1 million children out of poverty, according to the U.S. Census Bureau, with parents spending the majority of the money on food and housing, but the policy was a temporary one. It expired in 2022, and under current law, the maximum refundable child tax credit fell to $1,600 per child. 

Since then, Democrats have been fighting to reinstate the expanded tax credit in some form. The policy push has garnered some support from Republican lawmakers, but not enough to pass through Congress. A $79 billion bipartisan tax bill, which would have expanded the child tax credit up to $2,000 by 2025, stalled out in the Senate earlier this month after passing the House by an overwhelming margin back in February. Senator J.D. Vance did not vote on the motion to advance the bill, but floated raising the child tax credit to $5,000 per child during an interview with CBS’s Face the Nation days before Harris’s speech in North Carolina. 

With both presidential tickets finding common ground on the issue, it’s more likely to become a legislative priority next year in Congress. That’s a development that economists are applauding.

Guy Berger, formerly the principal economist at LinkedIn who now serves as the director of economic research at the Burning Glass Institute, wrote on X earlier today, “The fact that an expanded child tax credit is gaining traction across the American political spectrum is very exciting!” 

Entrepreneurs also shared their enthusiasm. Reshma Saujani, the founder of Girls Who Code and Moms First who landed on Inc.’s Female Founders list in 2021, wrote on X, “Child tax credits — alongside paid family leave and investments in child care — are an incredible, effective, and widely popular tool to relieve economic stress for America’s families. I’m glad to see it has strong support across the aisle.”