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Child Tax Credit Repeal/Reform

Comment 6th July 2010

The Child Tax Credit was initiated following WWII as an incentive for families to have more children and repopulate the nation.  This is no longer a relevant issue, and the cost of providing this benefit is significant for taxpayers.  It needs to be phased out. 

If we are not willing to get rid of the "tax credit", it needs to be reformed into a true welfare benefit: Currently, eligibility for the Child Tax Credit requires that applicants disclose income from paid employment, but specifically excludes disclosure of maintenance payments and other benefits (housing, automobile, etc) that are provided by a former spouse.  As maintenance is a form of income, it needs to be considered in determining eligibility for the Child Tax Credit.

Further, if this is meant to be a "tax credit", it needs to be linked to the actual tax payer rather than the primary caregiver of children.  Maintenance payments and other benefits are typically provided on a post-tax basis, such that payments under the Child Tax Credit system are not "tax credits" but benefits.  These benefits are not need based, as previously mentioned.

Why does this matter?

Taxpayers should not be supplementing income for families who are capable of supporting themselves.  For individuals who are the primary caregivers of their children and receive substantial income from their former spouse on a post-tax basis, there is little justification as to why the government should provide them with incremental income at the taxpayers' expense.

There is also little reason that this system should still be in existence, as it rewards people for bearing children.  Times have changed and so must our systems to reflect the needs of the country and societ.

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