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Covid-19 Sentry

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Contents

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From Preprints

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From Clinical Trials

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From PubMed

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From Patent Search

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Daily-Dose

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Contents

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From New Yorker

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From Vox

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+Effectively, the new credit means that everyone gets the full refundable credit once they earn $14,000 a year or more, whereas under previous law parents of three kids making as much as $34,000 a year still weren’t getting the full benefit. +

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+As the chart indicates, this change is targeted at families earning in the $20,000 to $40,000 a year range, not families with little or no income. The Tax Policy Center estimates that about 58 percent of the tax benefit goes to families earning $20,000 to $40,000 a year, with almost all of it (87.2 percent) going to families making $10,000 to $50,000. The average benefiting family gets $1,130 more a year from the change. +

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+The law also changes the refundable maximum. Under current law, the maximum is indexed for inflation. It had increased to $1,600 for 2023 and was due to keep increasing. The $2,000 maximum credit for families who owe income taxes, by contrast, was not indexed for inflation. Over time, observers expected the refundable maximum to reach $2,000 due to inflation and thus become irrelevant. +

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+The Wyden-Smith deal speeds up that convergence by increasing the 2023 maximum to $1,800, then setting it to $1,900 in 2024 and $2,000 in 2025. Both those numbers and the total $2,000 credit will be indexed for inflation. By 2025, the maximum is done away with, and poor taxpayers get the same $2,000 credit as everyone else from that year onward. Better yet, all taxpayers get a constantly increasing child credit thereafter. Like the change to the phase-in approach, most of the benefit from this policy goes to those making $20,000 to $40,000 a year, per the Tax Policy Center. The average affected household gets about $350 back a year. +

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+Finally, the deal includes a “lookback” provision for tax years 2024 and 2025. This allows a taxpayer to use the previous year’s income to qualify for the credit, if doing so results in a bigger benefit. This rule has been introduced in the past to account for emergencies (like Covid), and it’s generally beneficial to families enduring temporary difficulties. Under current law, a parent who earned $30,000 in 2023 but spent all of 2024 unemployed would get nothing from the child tax credit in the latter year. But with a lookback, they could get the full credit. +

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+How big a deal is this? +

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+Putting all the provisions together, the Center on Budget and Policy Priorities estimates that the deal will lift about 400,000 children out of poverty, and make another 3 million less poor, in its first year. By 2025, it will be keeping 500,000 children a year out of poverty. +

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+While nothing to sneeze at, this is a far cry from the roughly 3 million children that would been lifted out of poverty in 2022 if the 2021 expansion of the credit had been extended. It is a dramatically more modest step. It also takes as a given that the credit will not be available to families with zero earnings, a key disagreement between Democratic and Republican legislators on which the latter have shown no flexibility. +

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+All that being said, the CBPP authors note that the proposal is very well-targeted, and its CTC provisions “direct all of their benefits to children in low-income families who receive less than the full credit under current law.” +

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+Some Democratic legislators, notably House Ways and Means ranking member Richard Neal (D-MA) and longtime child credit champion and Appropriations ranking member Rosa DeLauro (D-CT), have signaled opposition to the deal, arguing it does not go far enough. +

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+And, indeed, for supporters of the 2021 credit, it does not go nearly far enough. By some other standards, it’s also a bit of a disappointment. When I wrote about a possible compromise back in November, I envisioned a bill that increased the credit’s phase-in rate to 30 percent and reduced the earnings minimum from $2,500 to $0. Neither of those changes made it into the final deal. I think they’re logical next steps for antipoverty advocates to demand. +

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+But 400,000 children taken out of poverty is also nothing to sneeze at, and some business credits with bipartisan support are a pretty paltry price to pay. So too is the early expiration of a program intended for the dark days of 2020, when Covid was causing mass unemployment, and not 2024 when unemployment is under 4 percent. +

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+I expect that as the measure reaches the House and Senate floors, supporters of the child credit will come around and back it. The alternative is a status quo that does even less for children. +

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From The Hindu: Sports

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From The Hindu: National News

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From BBC: Europe

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From Ars Technica

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From Jokes Subreddit

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