Republicans in Congress have introduced legislation that would increase the standard deduction in order to combat the effects of inflation. That legislation would offer a “bonus” standard deduction for 2024 and 2025 ($4,000 for married households and $2,000 for single filers).
Others have suggested that expanding the child tax credit would be a better way to fight inflation than increasing the standard deduction amount. Some of those proposals suggest that making the child tax credit fully refundable would provide the greatest assistance to all Americans.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether increasing the standard deduction is a better way to fight inflation than expanding the child tax credit.
Below is a summary of the debate that ensued between the two professors.
Their Votes:
Their Reasons:
Byrnes: Increasing the standard deduction is a smarter way to fight inflation because each and every taxpayer is entitled to claim the standard deduction. The fact is that not every American family has young children who qualify for the child tax credit. That means fewer families would benefit from increasing the child tax credit — and fewer families would feel relief from today’s inflationary prices.
Bloink: The greatest savings from increasing the standard deduction would go to the highest-income taxpayers. Those are precisely the taxpayers who are less likely to be impacted by inflation in the first place. That’s because of the progressive nature of the U.S. federal income tax structure. Expansion of the child tax credit would provide a greater benefit for working-class families who are struggling the most in today’s environment.