Sherrill, Payne Of NJ Back Child Tax Bill – But Others Have Doubts

ESSEX COUNTY, NJ — Two U.S. Congress members from Essex County have thrown their support – and votes – behind a proposed law that would expand a federal tax credit that benefits millions of children across the nation. But some of their peers say the bill is too watered down and has too many carve-outs for corporations and businesses.

Rep. Donald Payne Jr. (NJ-10) and Rep. Mikie Sherrill (NJ-11) – who represent a large swath of Essex County – were among the House members who voted for the Tax Relief for American Families and Workers Act on Jan. 31.

If it crosses the finish line, the bill would create or beef up several federal tax breaks for businesses, disaster relief and affordable housing.

The bill would also make key changes to the Child Tax Credit – which allows millions of parents across the nation to claim a tax break for their children. Read More: Child Tax Credit May Increase In 2024 For NJ Parents (What To Know)

The proposed bill would allow more lower-income families to receive a larger tax credit. The benefits would increase the maximum credit per child to $1,800 in 2023, $1,900 in 2024 and $2,000 in 2025. Benefits would also be tied to inflation.

Children under 17 years of age by the end of 2024 with a social security number would be eligible for the expanded child tax credit. You can check your eligibility here.

Eligible households would see an average tax cut of $680, according to estimates from the Tax Policy Center.

Why does the Child Tax Credit (CTC) formula need to be updated? According to a statement from Sherrill’s office:

“Under current law, many low-income families do not make enough money to qualify for the full CTC or claim a credit for each of their children. With this deal, these low-income families will now be able to receive the CTC for each of their children. The deal also indexes the CTC to inflation, allowing most families to see an increase in their credit. This expansion would lift 400,000 children above the poverty line and benefit around 16 million children in low-income families in its first year of enactment, including 323,000 kids in New Jersey statewide.”

According to a cost estimate from the nonpartisan Congressional Budget Office, the Tax Relief for American Families and Workers Act would add $44.7 billion to the federal deficit from 2024 to 2028 and $399 billion to the deficit from 2024 to 2033.

The bill would go into effect for the 2024 tax year. It passed a vote in the U.S. House of Representatives by an overwhelming margin, 357-70. It now heads to the Senate for a vote in that chamber of Congress.

A MIXED BAG

The tax bill got a “yes” vote in the House from Sherrill and Payne, both Democrats, along with several of their Democratic peers from New Jersey: Reps. Bonnie Watson Coleman, Josh Gottheimer, Bill Pascrell, Rob Menendez Jr. and Andy Kim. It also got “yes” votes from two Republicans: Reps. Chris Smith and Jeff Van Drew.

However, the bill saw “no” votes from Rep. Tom Kean Jr., a Republican and Livingston native, as well as Rep. Frank Pallone, a Democrat.

Rep. Donald Norcross (NJ-1) didn’t vote on the bill.

Pallone explained the reason he voted against the proposed legislation in a statement on social media, saying that it is too watered-down and too favorable to corporate interests to support.

“Democrats have shown that the best way to lift kids out of poverty is by expanding the Child Tax Credit,” the congressman wrote. “I voted against the tax deal today because it falls short of what's needed to help lift low-income families out of poverty and gives lopsided benefits to corporations.”

On the opposite end of the political aisle, the America First Policy Institute – a nonprofit think tank that was founded to promote the agenda of former president Donald Trump – said the bill is worth supporting – if you hold your nose while doing so.

The proposed changes to the Child Tax Credit are a mixed bag, the group says:

“This proposal would prevent inflation from further eroding the purchasing power of the CTC, and it would not sever the link between income and work in the way that progressives have previously sought to do by eliminating work requirements entirely. In that sense, the proposed changes here would be clearly superior to the damaging and partisan 2021 CTC expansion. However, the lookback provision is anti-work and anti-growth, even if it is the progressive’s ransom demand in exchange for acquiescence to the pro-growth tax policies contained elsewhere in the compromise legislation.”

Meanwhile, the liberal-leaning Institute on Taxation and Economic Policy said the legislation would boost many low-income Americans – but also put money in the pockets of many wealthy U.S. residents and foreign investors.

“The net result of the bill is significant benefits for families among the poorest 40 percent of Americans, but also sizable benefits for many well-off Americans who own shares in corporations or own other types of business assets,” the nonprofit said in a recent analysis. “It also provides benefits to foreign investors in American corporations receiving the business tax breaks in the legislation.”

‘PUTTING FOOD ON THE TABLE’

Despite the concerns about the tax package’s benefits for businesses, its supporters say the provisions on the Child Tax Credit will be an overall win for hundreds of thousands of kids across New Jersey – and their grateful families.

“I was proud to vote for the Tax Relief for American Families and Workers Act, which [would expand] the Child Tax Credit to help hardworking American families put food on the table,” said Payne, a Newark resident.

“Now, we need to do more for American families and pass bills to create more affordable child care for them,” Payne added.

It was a viewpoint shared by Sherrill during a news conference on Friday at the Clinton Hill Early Education Center in Newark (watch the video online here).

Sherrill pointed out that the American Rescue Plan passed during the coronavirus pandemic expanded the Child Tax Credit. But that expansion expired in 2022 – and it deserves to be renewed, she said.

“Child poverty was cut in half after House Democrats expanded this tax credit in 2021, and earlier this year we moved a step closer to restoring this important lifeline,” the congresswoman said.

Other speakers and organizations present at Friday’s news conference in Newark included Senate Majority Leader Teresa Ruiz, Assemblywoman Eliana Pintor Marin, Essex County Commissioner A’Dorian Murray-Thomas, and representatives from the Newark City Council, Clinton Hill Community Action, the Maher Charitable Foundation, the New Jersey Institute for Social Justice, La Casa de Don Pedro, and New Jersey Association for the Education of Young Children.

The tax bill has also seen support from other Congressional Democrats, including Rep. Kim (NJ-3).

“This bipartisan bill is a big step in putting more money back into the pockets of working parents across New Jersey to help them deal with the stresses of rising costs,” Kim said. “By restoring the Child Tax Credit, we can lift approximately 400,000 kids out of poverty, but there’s still more work to be done.”

This article contains reporting by Nicole Rosenthal, Patch staff

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.