From b3fb51de6f5813b4b648db78960c0565e814f7d9 Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Wed, 15 Jan 2025 00:35:35 +0100 Subject: [PATCH 01/13] Family First Act blog post Fixes #2298 --- mediumexporter | 0 random.md | 107 +++++++++++++++++++++++++ src/images/posts/family-first-act.jpg | Bin 0 -> 53114 bytes src/posts/articles/family-first-act.md | 106 ++++++++++++++++++++++++ src/posts/posts.json | 9 +++ 5 files changed, 222 insertions(+) create mode 100644 mediumexporter create mode 100644 random.md create mode 100644 src/images/posts/family-first-act.jpg create mode 100644 src/posts/articles/family-first-act.md diff --git a/mediumexporter b/mediumexporter new file mode 100644 index 000000000..e69de29bb diff --git a/random.md b/random.md new file mode 100644 index 000000000..254201602 --- /dev/null +++ b/random.md @@ -0,0 +1,107 @@ +# Family First Act + +On January 13th, Congressman Blake Moore (R-UT) introduced the Family First Act, a bill that reforms the Child Tax Credit and other tax programs. + +![](https://cdn-images-1.medium.com/max/2400/0*saoZGSjWAvXL81ys.jpg) + +## Reform description + +The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: + +![](https://cdn-images-1.medium.com/max/2236/1*LhW-I6WQIaQsnqgVll5-xw.png) + +## Child Tax Credit (CTC) + +The FFA would expand the CTC from $1,000 to $4,200 (up to age five) and $3,000 (age six to 17), up to six children per filer. It phases in from $0 to $20,000 of modified adjusted gross income (the CTC also phases in under current law). It also phases out at 5% for filers with income over $200,000 ($400,000 joint), as it is for 2018–2025 under the Tax Cuts and Jobs Act (TCJA); this is scheduled to revert to $75,000 ($110,000 joint) in 2026. + +## Pregnant mother’s credit + +The FFA includes a pregnant mother’s credit, providing up to $2,800 for each newborn child which is phased-in for earnings until $10,000. + +## Reform the Earned Income Tax Credit (EITC) + +The FFA consolidates the EITC structure from eight household types (single/joint and 0/1/2/3+ children) to four (single/joint and 0/1+ children). It phases in at 7.65% for households without children (as current law does) and 34% for households with children (as current law does for households with one child). It phases out at 10% for households without children (compared to 7.65% today) and 25% for households with children (compared to 15.98% for households with one child, or 21.06% for households with two or more children today). + +Table 2: EITC reform parameters + +![](https://cdn-images-1.medium.com/max/3008/1*8GKkbgodYVZspHO6a-Fo3A.png) + +## Repeal head of household filing status + +The FFA repeals head of household filing status, which increases tax thresholds for single parents. + +## Repeal dependent exemptions + +TCJA repealed all personal and dependent exemptions from 2018 to 2025. Starting in 2026, FFA will continue the TCJA’s dependent exemption (leaving personal exemptions intact), which would otherwise return at [$5,300 in 2026](https://www.law.cornell.edu/uscode/text/26/151#d_5_A). + +## Repeal child portion of the Child and Dependent Care Credit (CDCC) + +Under the FFA, the CDCC will only apply for childcare expenses which are incurred for dependents over the age of 18 who are incapable of self care due to disability. Currently, the credit can be claimed for a portion of expenses for household and dependent care services incurred for dependents under the age of thirteen. + +## Cap the state and local tax (SALT) deduction + +The $10,000 cap on itemized deductions for state and local taxes, introduced in the TCJA, is scheduled to be lifted in 2026. The FFA would extend this provision. + +## Household impacts + +Using the PolicyEngine US household calculator and Python package, we have examined the impact of the proposed reform on different household compositions. + +Looking at single parent and married households with and without childcare expenses, we find that single households face income reductions of up to $10,000 at income levels of $300,000-$400,000 depending on the number of children. Married households experience a positive impact for earnings up to $400,000, peaking at around +$4,000-$5,000, until dropping near zero at incomes above $600,000. For both household types, the presence of more children increases the income due to the expanded CTC. + +![](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) + +Due to the CDCC repeal, the presence of $10,000 of childcare expenses decreases net income by a maximum of $3,000. Married households experience a continuous positive impact for earnings up to $420,000 before declining, while single households experience a steeper decline in impact as earnings increase. This steeper decline can be attributed to changes in the earned income tax credit, which aims to reduce potential marriage penalties in the current structure. + +When considering a single parent household of two children, aged five and ten with $30,000 of employment income in Utah, the FFA would increase the total net income by [$1,853](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). This is due to a: + +- $5,395 CTC increase + +- $1,688 EITC reduction + +- $338 Utah EITC reduction + +- $1,854 tax increase before credits, due to the repeal of dependent exemptions and head of household filing status + +This household will experience a [varying positive net income effect](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565) for earnings up to $188,000 after which their net income will decrease gradually to a maximum negative impact of about $5,900 at $350,000 of income. + +![](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) + +Due to the interaction of multiple credit programs as well as deductions and filing status changes, the reform [alters marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48792) from between -30 and +29 percentage points, with most fluctuations occurring at earnings levels below $50,000. + +![](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) + +## National impacts + +To estimate the economic effects, we apply the PolicyEngine US 1.172.0 microsimulation model and our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). We do not include any behavioral responses. + +## Income distribution impacts + +In 2026, we project that the FFA would raise [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in revenue, increasing federal revenues by a total of $20.4 billion. The CTC reform costs $171.3 billion (we include the pregnant mother’s credit in the CTC bar); however, the FFA’s consolidations and the retention of the $10,000 SALT cap in 2026 raises $195.6 billion creating a positive budgetary impact. + +![](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) + +From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. + +![](https://cdn-images-1.medium.com/max/5028/1*0gzNJjwZm96oFVFpGBpzfg.png) + +![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) + +State revenues would increase by $3.9 billion in 2026 under the FFA, partially due to states matching the federal EITC and CTC under available state tax credits. + +## Distributional impacts + +The Family First Act would [increase the net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) of 36% of the population, with those in the ninth decile most likely to experience an increase in household income (47%). Additionally, it would reduce the income of 16% of people, disproportionately those in the top income decile (49%). + +![](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) + +## Poverty and inequality impacts + +Our analysis finds that the FFA would [reduce the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) by 5.9% (1.5 percentage point reduction in the Supplemental Poverty Measure) in 2026. It would reduce child poverty by 10.7% and senior and working age adult poverty by 0.8% and 4.8% respectively, while reducing deep poverty by [2.1%.](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) + +![](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) + +The reform would also reduce the Gini index of income inequality by [1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) in 2026, with the share of net income held by the top 1% falling by 3.1%. + +## Conclusion + +Congressman Blake Moore’s Family First Act proposes changes to an array of tax policies in the United States. Key reforms include restructuring the Earned Income Tax Credit, introducing a newly tiered Child Tax Credit system, modifying the CDCC as well as the SALT deduction, and eliminating head of household filing status and the dependent exemption. Our projections suggest the FFA would raise $534.7 billion over the 2025–2034 budget window with revenues increasing annually. 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b/src/posts/articles/family-first-act.md @@ -0,0 +1,106 @@ +The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: + +![](https://cdn-images-1.medium.com/max/2236/1*LhW-I6WQIaQsnqgVll5-xw.png) + +## Child Tax Credit (CTC) + +The FFA would expand the CTC from $1,000 to $4,200 (up to age five) and $3,000 (age six to 17), up to six children per filer. It phases in from $0 to $20,000 of modified adjusted gross income (the CTC also phases in under current law). It also phases out at 5% for filers with income over $200,000 ($400,000 joint), as it is for 2018–2025 under the Tax Cuts and Jobs Act (TCJA); this is scheduled to revert to $75,000 ($110,000 joint) in 2026. + +## Pregnant mother’s credit + +The FFA includes a pregnant mother’s credit, providing up to $2,800 for each newborn child which is phased-in for earnings until $10,000. + +## Reform the Earned Income Tax Credit (EITC) + +The FFA consolidates the EITC structure from eight household types (single/joint and 0/1/2/3+ children) to four (single/joint and 0/1+ children). It phases in at 7.65% for households without children (as current law does) and 34% for households with children (as current law does for households with one child). It phases out at 10% for households without children (compared to 7.65% today) and 25% for households with children (compared to 15.98% for households with one child, or 21.06% for households with two or more children today). + +Table 2: EITC reform parameters[^1] +[^1]: Italicized parameters are derived from other parameters. + +![](https://cdn-images-1.medium.com/max/3008/1*8GKkbgodYVZspHO6a-Fo3A.png) + +## Repeal head of household filing status + +The FFA repeals head of household filing status, which increases tax thresholds for single parents. + +## Repeal dependent exemptions + +TCJA repealed all personal and dependent exemptions from 2018 to 2025. Starting in 2026, FFA will continue the TCJA’s dependent exemption (leaving personal exemptions intact), which would otherwise return at [$5,300 in 2026](https://www.law.cornell.edu/uscode/text/26/151#d_5_A). + +## Repeal child portion of the Child and Dependent Care Credit (CDCC) + +Under the FFA, the CDCC will only apply for childcare expenses which are incurred for dependents over the age of 18 who are incapable of self care due to disability. Currently, the credit can be claimed for a portion of expenses for household and dependent care services incurred for dependents under the age of thirteen. + +## Cap the state and local tax (SALT) deduction + +The $10,000 cap on itemized deductions for state and local taxes, introduced in the TCJA, is scheduled to be lifted in 2026. The FFA would extend this provision. + +## Household impacts + +Using the PolicyEngine US household calculator and Python package, we have examined the impact of the proposed reform on different household compositions. + +Looking at single parent and married households with and without childcare expenses, we find that single households face income reductions of up to $10,000 at income levels of $300,000-$400,000 depending on the number of children. Married households experience a positive impact for earnings up to $400,000, peaking at around +$4,000-$5,000, until dropping near zero at incomes above $600,000. For both household types, the presence of more children increases the income due to the expanded CTC. + +![](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) + +Due to the CDCC repeal, the presence of $10,000 of childcare expenses decreases net income by a maximum of $3,000. Married households experience a continuous positive impact for earnings up to $420,000 before declining, while single households experience a steeper decline in impact as earnings increase. This steeper decline can be attributed to changes in the earned income tax credit, which aims to reduce potential marriage penalties in the current structure. + +When considering a single parent household of two children, aged five and ten with $30,000 of employment income in Utah, the FFA would increase the total net income by [$1,853](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). This is due to a: + +- $5,395 CTC increase + +- $1,688 EITC reduction + +- $338 Utah EITC reduction + +- $1,854 tax increase before credits, due to the repeal of dependent exemptions and head of household filing status + +This household will experience a [varying positive net income effect](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565) for earnings up to $188,000 after which their net income will decrease gradually to a maximum negative impact of about $5,900 at $350,000 of income. + +![](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) + +Due to the interaction of multiple credit programs as well as deductions and filing status changes, the reform [alters marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48792) from between -30 and +29 percentage points, with most fluctuations occurring at earnings levels below $50,000. + +![](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) + +## National impacts + +To estimate the economic effects, we apply the PolicyEngine US 1.172.0 microsimulation model and our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). We do not include any behavioral responses.[^2] + +[^2]: While we assume full CTC takeup, we assume partial EITC takeup based on [this](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/JRC20_Volume3.pdf#page=62) report. + +## Budgetary impacts + +In 2026, we project that the FFA would raise [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in revenue, increasing federal revenues by a total of $20.4 billion. The CTC reform costs $171.3 billion (we include the pregnant mother’s credit in the CTC bar); however, the FFA’s consolidations and the retention of the $10,000 SALT cap in 2026 raises $195.6 billion creating a positive budgetary impact.[^3] + +[^3]: Analysis conducted in [this](https://github.com/PolicyEngine/analysis-notebooks/tree/main/us/family_first_act) public GitHub repository using the policyengine-us Python package. + +![](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) + +From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. + +![](https://cdn-images-1.medium.com/max/5028/1*0gzNJjwZm96oFVFpGBpzfg.png) + +![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) + +State revenues would increase by $3.9 billion in 2026 under the FFA, partially due to states matching the federal EITC and CTC under available state tax credits. + +## Distributional impacts + +The Family First Act would [increase the net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) of 36% of the population, with those in the ninth decile most likely to experience an increase in household income (47%)[^4]. Additionally, it would reduce the income of 16% of people, disproportionately those in the top income decile (49%). + +[^4]: The distributional impacts include impacts from State tax changes such as the Utah EITC which matches the federal credit by 20% in 2026. + +![](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) + +## Poverty and inequality impacts + +Our analysis finds that the FFA would [reduce the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) by 5.9% (1.5 percentage point reduction in the Supplemental Poverty Measure) in 2026. It would reduce child poverty by 10.7% and senior and working age adult poverty by 0.8% and 4.8% respectively, while reducing deep poverty by [2.1%.](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) + +![](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) + +The reform would also reduce the Gini index of income inequality by [1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) in 2026, with the share of net income held by the top 1% falling by 3.1%. + +## Conclusion + +Congressman Blake Moore’s Family First Act proposes changes to an array of tax policies in the United States. Key reforms include restructuring the Earned Income Tax Credit, introducing a newly tiered Child Tax Credit system, modifying the CDCC as well as the SALT deduction, and eliminating head of household filing status and the dependent exemption. Our projections suggest the FFA would raise $534.7 billion over the 2025–2034 budget window with revenues increasing annually. The reform increases net income for 36% of the population, reducing overall poverty rates by 5.9% and child poverty by 10.7%. diff --git a/src/posts/posts.json b/src/posts/posts.json index 4bfc608de..4bbab259e 100644 --- a/src/posts/posts.json +++ b/src/posts/posts.json @@ -1045,5 +1045,14 @@ "authors": ["max-ghenis", "nikhil-woodruff"], "filename": "us-year-in-review-2024.md", "image": "year-in-review-2024.png" + }, + { + "title": "Policyengine's analysis of the Family First Act", + "description": "On January 13th, Congressman Blake Moore (R-UT) introduced the Family First Act, a bill that reforms the Child Tax Credit and other tax programs.", + "date": "2025-01-15 09:00:00", + "tags": ["us", "policy", "featured"], + "authors": ["pavel-makarchuk"], + "filename": "family-first-act.md", + "image": "family-first-act.jpg" } ] From 6ceb685718216a37eacc2cc1b6f93e7b78e00dc2 Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Wed, 15 Jan 2025 17:12:14 +0100 Subject: [PATCH 02/13] markdown --- src/posts/articles/family-first-act.md | 23 ++++++++++++++++++++--- 1 file changed, 20 insertions(+), 3 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index 5871acd91..dd1039dd9 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,6 +1,15 @@ The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: -![](https://cdn-images-1.medium.com/max/2236/1*LhW-I6WQIaQsnqgVll5-xw.png) +| Program | Current Policy | Current Law 2026 | FFA | +|-------------------------------|-------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------| +| **Child Tax Credit** | $2,000 per child

Phases out at 5% for income over $200,000 ($400,000 for joint filers) | $1,000 per child

Phases out at 5% for income over $75,000 ($110,000 for joint filers) | $4,200 per child under 6

$3,000 per child under 18

Phases out at 5% for income over $200,000 ($400,000 for joint filers)

Phases in for earnings up to $20,000

Capped at 6 children | +| **Pregnant Mother’s Credit** | None | None | $2,800 per newborn child

Phases in for earnings up to $10,000 | +| **Earned Income Tax Credit** | Phase-in rate:

7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$649 - no children
$4,328 - one child
$7,152 - two children
$8,046 - three or more
Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:

$10,620 - no children
$23,350 - one or more children
Joint filers:
$17,730 - no children
$30,470 - one or more | Phase-in rate:
7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$662 - no children
$4,413 - one child
$7,292 - two children
$8,204 - three or more

Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:
$10,830 - no children
$23,810 - one or more children
Joint filers:
$18,080 - no children
$31,060 - one or more | See Table 2 | +| **Child and Dependent Care Tax Credit** | Childcare expenses included for children under 18 | Childcare expenses included for children under 18 | Childcare expenses included only for children under 18 | +| **Dependent Exemptions** | $0 | $5,300 | $0 | +| **Head of Household Status** | Active | Active | Repealed | +| **SALT Deduction** | $10,000 per filer | Uncapped | $10,000 per person | + ## Child Tax Credit (CTC) @@ -17,7 +26,13 @@ The FFA consolidates the EITC structure from eight household types (single/joint Table 2: EITC reform parameters[^1] [^1]: Italicized parameters are derived from other parameters. -![](https://cdn-images-1.medium.com/max/3008/1*8GKkbgodYVZspHO6a-Fo3A.png) +| Marital Status | Children | Phase-in Rate | Phase-in Earnings Range | Maximum Credit | Phase-out AGI Threshold | Phase-out Rate | AGI Limit | +|----------------|---------------|---------------|--------------------------|----------------|--------------------------|----------------|-----------| +| Single | No children | 7.65% | $9,150 | $700 | $10,000 | 10% | $17,000 | +| Single | With children | 34% | $12,647 | $4,300 | $33,000 | 25% | $50,200 | +| Married | No children | 7.65% | $18,301 | $1,400 | $20,000 | 10% | $34,000 | +| Married | With children | 34% | $14,706 | $5,000 | $43,000 | 25% | $63,000 | + ## Repeal head of household filing status @@ -79,7 +94,9 @@ In 2026, we project that the FFA would raise [$24.3 billion](https://policyengin From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. -![](https://cdn-images-1.medium.com/max/5028/1*0gzNJjwZm96oFVFpGBpzfg.png) +| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | +| ------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ----- | +| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | ![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) From 648326ff1ddec6e9337682b84b687b25a99f3eb7 Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Wed, 15 Jan 2025 20:46:08 +0100 Subject: [PATCH 03/13] format --- src/posts/articles/family-first-act.md | 36 ++++++++++++-------------- 1 file changed, 17 insertions(+), 19 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index dd1039dd9..b4697b9eb 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,15 +1,14 @@ The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: -| Program | Current Policy | Current Law 2026 | FFA | -|-------------------------------|-------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------| -| **Child Tax Credit** | $2,000 per child

Phases out at 5% for income over $200,000 ($400,000 for joint filers) | $1,000 per child

Phases out at 5% for income over $75,000 ($110,000 for joint filers) | $4,200 per child under 6

$3,000 per child under 18

Phases out at 5% for income over $200,000 ($400,000 for joint filers)

Phases in for earnings up to $20,000

Capped at 6 children | -| **Pregnant Mother’s Credit** | None | None | $2,800 per newborn child

Phases in for earnings up to $10,000 | -| **Earned Income Tax Credit** | Phase-in rate:

7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$649 - no children
$4,328 - one child
$7,152 - two children
$8,046 - three or more
Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:

$10,620 - no children
$23,350 - one or more children
Joint filers:
$17,730 - no children
$30,470 - one or more | Phase-in rate:
7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$662 - no children
$4,413 - one child
$7,292 - two children
$8,204 - three or more

Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:
$10,830 - no children
$23,810 - one or more children
Joint filers:
$18,080 - no children
$31,060 - one or more | See Table 2 | -| **Child and Dependent Care Tax Credit** | Childcare expenses included for children under 18 | Childcare expenses included for children under 18 | Childcare expenses included only for children under 18 | -| **Dependent Exemptions** | $0 | $5,300 | $0 | -| **Head of Household Status** | Active | Active | Repealed | -| **SALT Deduction** | $10,000 per filer | Uncapped | $10,000 per person | - +| Program | Current Policy | Current Law 2026 | FFA | +| --------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | +| **Child Tax Credit** | $2,000 per child

Phases out at 5% for income over $200,000 ($400,000 for joint filers) | $1,000 per child

Phases out at 5% for income over $75,000 ($110,000 for joint filers) | $4,200 per child under 6

$3,000 per child under 18

Phases out at 5% for income over $200,000 ($400,000 for joint filers)

Phases in for earnings up to $20,000

Capped at 6 children | +| **Pregnant Mother’s Credit** | None | None | $2,800 per newborn child

Phases in for earnings up to $10,000 | +| **Earned Income Tax Credit** | Phase-in rate:

7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$649 - no children
$4,328 - one child
$7,152 - two children
$8,046 - three or more
Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:

$10,620 - no children
$23,350 - one or more children
Joint filers:
$17,730 - no children
$30,470 - one or more | Phase-in rate:
7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$662 - no children
$4,413 - one child
$7,292 - two children
$8,204 - three or more

Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:
$10,830 - no children
$23,810 - one or more children
Joint filers:
$18,080 - no children
$31,060 - one or more | See Table 2 | +| **Child and Dependent Care Tax Credit** | Childcare expenses included for children under 18 | Childcare expenses included for children under 18 | Childcare expenses included only for children under 18 | +| **Dependent Exemptions** | $0 | $5,300 | $0 | +| **Head of Household Status** | Active | Active | Repealed | +| **SALT Deduction** | $10,000 per filer | Uncapped | $10,000 per person | ## Child Tax Credit (CTC) @@ -27,12 +26,11 @@ Table 2: EITC reform parameters[^1] [^1]: Italicized parameters are derived from other parameters. | Marital Status | Children | Phase-in Rate | Phase-in Earnings Range | Maximum Credit | Phase-out AGI Threshold | Phase-out Rate | AGI Limit | -|----------------|---------------|---------------|--------------------------|----------------|--------------------------|----------------|-----------| -| Single | No children | 7.65% | $9,150 | $700 | $10,000 | 10% | $17,000 | -| Single | With children | 34% | $12,647 | $4,300 | $33,000 | 25% | $50,200 | -| Married | No children | 7.65% | $18,301 | $1,400 | $20,000 | 10% | $34,000 | -| Married | With children | 34% | $14,706 | $5,000 | $43,000 | 25% | $63,000 | - +| -------------- | ------------- | ------------- | ----------------------- | -------------- | ----------------------- | -------------- | --------- | +| Single | No children | 7.65% | $9,150 | $700 | $10,000 | 10% | $17,000 | +| Single | With children | 34% | $12,647 | $4,300 | $33,000 | 25% | $50,200 | +| Married | No children | 7.65% | $18,301 | $1,400 | $20,000 | 10% | $34,000 | +| Married | With children | 34% | $14,706 | $5,000 | $43,000 | 25% | $63,000 | ## Repeal head of household filing status @@ -94,9 +92,9 @@ In 2026, we project that the FFA would raise [$24.3 billion](https://policyengin From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. -| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | -| ------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ----- | -| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | +| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | +| ------------------------------ | ---- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------- | +| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | ![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) From 63876878fdf51ae62d9ffb7a39b329d11ef4f258 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Thu, 16 Jan 2025 09:35:19 -0800 Subject: [PATCH 04/13] fix table and remove files --- mediumexporter | 0 random.md | 107 ------------------------- src/posts/articles/family-first-act.md | 28 ++++--- src/posts/posts.json | 6 +- 4 files changed, 22 insertions(+), 119 deletions(-) delete mode 100644 mediumexporter delete mode 100644 random.md diff --git a/mediumexporter b/mediumexporter deleted file mode 100644 index e69de29bb..000000000 diff --git a/random.md b/random.md deleted file mode 100644 index 254201602..000000000 --- a/random.md +++ /dev/null @@ -1,107 +0,0 @@ -# Family First Act - -On January 13th, Congressman Blake Moore (R-UT) introduced the Family First Act, a bill that reforms the Child Tax Credit and other tax programs. - -![](https://cdn-images-1.medium.com/max/2400/0*saoZGSjWAvXL81ys.jpg) - -## Reform description - -The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: - -![](https://cdn-images-1.medium.com/max/2236/1*LhW-I6WQIaQsnqgVll5-xw.png) - -## Child Tax Credit (CTC) - -The FFA would expand the CTC from $1,000 to $4,200 (up to age five) and $3,000 (age six to 17), up to six children per filer. It phases in from $0 to $20,000 of modified adjusted gross income (the CTC also phases in under current law). It also phases out at 5% for filers with income over $200,000 ($400,000 joint), as it is for 2018–2025 under the Tax Cuts and Jobs Act (TCJA); this is scheduled to revert to $75,000 ($110,000 joint) in 2026. - -## Pregnant mother’s credit - -The FFA includes a pregnant mother’s credit, providing up to $2,800 for each newborn child which is phased-in for earnings until $10,000. - -## Reform the Earned Income Tax Credit (EITC) - -The FFA consolidates the EITC structure from eight household types (single/joint and 0/1/2/3+ children) to four (single/joint and 0/1+ children). It phases in at 7.65% for households without children (as current law does) and 34% for households with children (as current law does for households with one child). It phases out at 10% for households without children (compared to 7.65% today) and 25% for households with children (compared to 15.98% for households with one child, or 21.06% for households with two or more children today). - -Table 2: EITC reform parameters - -![](https://cdn-images-1.medium.com/max/3008/1*8GKkbgodYVZspHO6a-Fo3A.png) - -## Repeal head of household filing status - -The FFA repeals head of household filing status, which increases tax thresholds for single parents. - -## Repeal dependent exemptions - -TCJA repealed all personal and dependent exemptions from 2018 to 2025. Starting in 2026, FFA will continue the TCJA’s dependent exemption (leaving personal exemptions intact), which would otherwise return at [$5,300 in 2026](https://www.law.cornell.edu/uscode/text/26/151#d_5_A). - -## Repeal child portion of the Child and Dependent Care Credit (CDCC) - -Under the FFA, the CDCC will only apply for childcare expenses which are incurred for dependents over the age of 18 who are incapable of self care due to disability. Currently, the credit can be claimed for a portion of expenses for household and dependent care services incurred for dependents under the age of thirteen. - -## Cap the state and local tax (SALT) deduction - -The $10,000 cap on itemized deductions for state and local taxes, introduced in the TCJA, is scheduled to be lifted in 2026. The FFA would extend this provision. - -## Household impacts - -Using the PolicyEngine US household calculator and Python package, we have examined the impact of the proposed reform on different household compositions. - -Looking at single parent and married households with and without childcare expenses, we find that single households face income reductions of up to $10,000 at income levels of $300,000-$400,000 depending on the number of children. Married households experience a positive impact for earnings up to $400,000, peaking at around +$4,000-$5,000, until dropping near zero at incomes above $600,000. For both household types, the presence of more children increases the income due to the expanded CTC. - -![](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) - -Due to the CDCC repeal, the presence of $10,000 of childcare expenses decreases net income by a maximum of $3,000. Married households experience a continuous positive impact for earnings up to $420,000 before declining, while single households experience a steeper decline in impact as earnings increase. This steeper decline can be attributed to changes in the earned income tax credit, which aims to reduce potential marriage penalties in the current structure. - -When considering a single parent household of two children, aged five and ten with $30,000 of employment income in Utah, the FFA would increase the total net income by [$1,853](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). This is due to a: - -- $5,395 CTC increase - -- $1,688 EITC reduction - -- $338 Utah EITC reduction - -- $1,854 tax increase before credits, due to the repeal of dependent exemptions and head of household filing status - -This household will experience a [varying positive net income effect](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565) for earnings up to $188,000 after which their net income will decrease gradually to a maximum negative impact of about $5,900 at $350,000 of income. - -![](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) - -Due to the interaction of multiple credit programs as well as deductions and filing status changes, the reform [alters marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48792) from between -30 and +29 percentage points, with most fluctuations occurring at earnings levels below $50,000. - -![](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) - -## National impacts - -To estimate the economic effects, we apply the PolicyEngine US 1.172.0 microsimulation model and our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). We do not include any behavioral responses. - -## Income distribution impacts - -In 2026, we project that the FFA would raise [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in revenue, increasing federal revenues by a total of $20.4 billion. The CTC reform costs $171.3 billion (we include the pregnant mother’s credit in the CTC bar); however, the FFA’s consolidations and the retention of the $10,000 SALT cap in 2026 raises $195.6 billion creating a positive budgetary impact. - -![](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) - -From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. - -![](https://cdn-images-1.medium.com/max/5028/1*0gzNJjwZm96oFVFpGBpzfg.png) - -![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) - -State revenues would increase by $3.9 billion in 2026 under the FFA, partially due to states matching the federal EITC and CTC under available state tax credits. - -## Distributional impacts - -The Family First Act would [increase the net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) of 36% of the population, with those in the ninth decile most likely to experience an increase in household income (47%). Additionally, it would reduce the income of 16% of people, disproportionately those in the top income decile (49%). - -![](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) - -## Poverty and inequality impacts - -Our analysis finds that the FFA would [reduce the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) by 5.9% (1.5 percentage point reduction in the Supplemental Poverty Measure) in 2026. It would reduce child poverty by 10.7% and senior and working age adult poverty by 0.8% and 4.8% respectively, while reducing deep poverty by [2.1%.](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) - -![](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) - -The reform would also reduce the Gini index of income inequality by [1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) in 2026, with the share of net income held by the top 1% falling by 3.1%. - -## Conclusion - -Congressman Blake Moore’s Family First Act proposes changes to an array of tax policies in the United States. Key reforms include restructuring the Earned Income Tax Credit, introducing a newly tiered Child Tax Credit system, modifying the CDCC as well as the SALT deduction, and eliminating head of household filing status and the dependent exemption. Our projections suggest the FFA would raise $534.7 billion over the 2025–2034 budget window with revenues increasing annually. The reform increases net income for 36% of the population, reducing overall poverty rates by 5.9% and child poverty by 10.7%. diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index b4697b9eb..db4020b89 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,14 +1,24 @@ +On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), a bill that reforms the Child Tax Credit and other tax programs. + The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: -| Program | Current Policy | Current Law 2026 | FFA | -| --------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -| **Child Tax Credit** | $2,000 per child

Phases out at 5% for income over $200,000 ($400,000 for joint filers) | $1,000 per child

Phases out at 5% for income over $75,000 ($110,000 for joint filers) | $4,200 per child under 6

$3,000 per child under 18

Phases out at 5% for income over $200,000 ($400,000 for joint filers)

Phases in for earnings up to $20,000

Capped at 6 children | -| **Pregnant Mother’s Credit** | None | None | $2,800 per newborn child

Phases in for earnings up to $10,000 | -| **Earned Income Tax Credit** | Phase-in rate:

7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$649 - no children
$4,328 - one child
$7,152 - two children
$8,046 - three or more
Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:

$10,620 - no children
$23,350 - one or more children
Joint filers:
$17,730 - no children
$30,470 - one or more | Phase-in rate:
7.65% - no children
34% - one child
40% - two children
45% - three or more

Maximum credit:
$662 - no children
$4,413 - one child
$7,292 - two children
$8,204 - three or more

Phase-out rate:
7.65% - no children
15.98% - one child
21.06% - two or more

Phase-out start:
Head of Household filers:
$10,830 - no children
$23,810 - one or more children
Joint filers:
$18,080 - no children
$31,060 - one or more | See Table 2 | -| **Child and Dependent Care Tax Credit** | Childcare expenses included for children under 18 | Childcare expenses included for children under 18 | Childcare expenses included only for children under 18 | -| **Dependent Exemptions** | $0 | $5,300 | $0 | -| **Head of Household Status** | Active | Active | Repealed | -| **SALT Deduction** | $10,000 per filer | Uncapped | $10,000 per person | +| Program | Feature | Current Policy | Current Law 2026 | FFA | +| ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | +| Child Tax Credit | Maximum Credit Amount | $2,000 per child | $1,000 per child | $4,200 per child under 6; $3,000 per child under 18 | +| Child Tax Credit | Phase-out Threshold | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | +| Child Tax Credit | Phase-out Rate | 5% | 5% | 5% | +| Child Tax Credit | Phase-in Details | Up to $1,400 refundable, phases in at 15% of earnings above $2,500 | Up to $1,000 refundable, phases in at 15% of earnings above $3,000 | Phases in for earnings up to $20,000 at earnings/20,000 rate | +| Child Tax Credit | Child Cap | None | None | Maximum 6 children | +| Pregnant Mother's Credit | Maximum Credit Amount | None | None | $2,800 per newborn child | +| Pregnant Mother's Credit | Phase-in Requirements | None | None | Phases in for earnings up to $10,000 at earnings/10,000 rate | +| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | Single/Married: 7.65% (0 children); 34% (with children) | +| EITC | Maximum Credit | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | +| EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | +| EITC | Phase-out Start | Single: $10,620 (0 children), $23,350 (1+ children); Married: $17,730 (0 children), $30,470 (1+ children) | Single: $10,830 (0 children), $23,810 (1+ children); Married: $18,080 (0 children), $31,060 (1+ children) | Single: $10,000 (0 children), $33,000 (with children); Married: $20,000 (0 children), $43,000 (with children) | +| Child and Dependent Care Credit | Eligibility | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Only dependents/spouse physically/mentally incapable of self-care who are 18+ | +| Dependent Exemptions | Amount | $0 | $5,300 | $0 | +| Head of Household Status | Status | Active | Active | Repealed | +| SALT Deduction | Cap | $10,000 per filer | Uncapped | $10,000 per filer | ## Child Tax Credit (CTC) diff --git a/src/posts/posts.json b/src/posts/posts.json index 4bbab259e..dd417ba5f 100644 --- a/src/posts/posts.json +++ b/src/posts/posts.json @@ -1047,9 +1047,9 @@ "image": "year-in-review-2024.png" }, { - "title": "Policyengine's analysis of the Family First Act", - "description": "On January 13th, Congressman Blake Moore (R-UT) introduced the Family First Act, a bill that reforms the Child Tax Credit and other tax programs.", - "date": "2025-01-15 09:00:00", + "title": "Analysis of the Family First Act", + "description": "We project that Representative Blake Moore's Child Tax Credit bill would raise revenue and reduce poverty.", + "date": "2025-01-16 09:00:00", "tags": ["us", "policy", "featured"], "authors": ["pavel-makarchuk"], "filename": "family-first-act.md", From dd0b9d13ed7d43c3a1f30f63c501a0f7ed9baed6 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Thu, 16 Jan 2025 12:01:54 -0800 Subject: [PATCH 05/13] improve flow --- src/posts/articles/family-first-act.md | 197 +++++++++++++++---------- 1 file changed, 120 insertions(+), 77 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index db4020b89..8e2efbb9b 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,131 +1,174 @@ -On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), a bill that reforms the Child Tax Credit and other tax programs. +On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act (FFA)](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), which would reform several tax provisions starting in 2026 after the Tax Cuts and Jobs Act expires. This analysis uses PolicyEngine's microsimulation model to estimate its impacts on household incomes, poverty, inequality, and federal revenue. -The Family First Act (FFA) reforms several provisions beginning in 2026, following the Tax Cuts and Jobs Act’s expiration: +- **Child Tax Credit**: Increases amounts to $4,200 (up to age five) and $3,000 (ages six to 17), up to six children. Introduces a phase-in from $0 to $20,000 of earnings, continues a phase-out at $200,000 ($400,000 joint). +- **Pregnant Mother’s Credit**: Offers up to $2,800 per newborn, with a phase-in until $10,000 of earnings. +- **EITC**: Consolidates the structure from eight to four household types, phases in at existing rates for no children (7.65%) and one child (34%), and adjusts phase-outs. +- **Head of Household Filing Status**: Repeals the status entirely. +- **Dependent Exemptions**: Continues the dependent exemption repeal from the TCJA period into 2026 and beyond. +- **Child and Dependent Care Credit**: Restricts eligibility to dependents aged 18+ who cannot self-care due to disability. +- **SALT Deduction**: Retains the $10,000 deduction cap in 2026 and beyond. -| Program | Feature | Current Policy | Current Law 2026 | FFA | -| ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | -| Child Tax Credit | Maximum Credit Amount | $2,000 per child | $1,000 per child | $4,200 per child under 6; $3,000 per child under 18 | -| Child Tax Credit | Phase-out Threshold | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | -| Child Tax Credit | Phase-out Rate | 5% | 5% | 5% | -| Child Tax Credit | Phase-in Details | Up to $1,400 refundable, phases in at 15% of earnings above $2,500 | Up to $1,000 refundable, phases in at 15% of earnings above $3,000 | Phases in for earnings up to $20,000 at earnings/20,000 rate | -| Child Tax Credit | Child Cap | None | None | Maximum 6 children | -| Pregnant Mother's Credit | Maximum Credit Amount | None | None | $2,800 per newborn child | -| Pregnant Mother's Credit | Phase-in Requirements | None | None | Phases in for earnings up to $10,000 at earnings/10,000 rate | -| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | Single/Married: 7.65% (0 children); 34% (with children) | -| EITC | Maximum Credit | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | -| EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | -| EITC | Phase-out Start | Single: $10,620 (0 children), $23,350 (1+ children); Married: $17,730 (0 children), $30,470 (1+ children) | Single: $10,830 (0 children), $23,810 (1+ children); Married: $18,080 (0 children), $31,060 (1+ children) | Single: $10,000 (0 children), $33,000 (with children); Married: $20,000 (0 children), $43,000 (with children) | -| Child and Dependent Care Credit | Eligibility | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Only dependents/spouse physically/mentally incapable of self-care who are 18+ | -| Dependent Exemptions | Amount | $0 | $5,300 | $0 | -| Head of Household Status | Status | Active | Active | Repealed | -| SALT Deduction | Cap | $10,000 per filer | Uncapped | $10,000 per filer | +See **Table A.1** in the Appendix for a detailed comparison of FFA, current policy (under TCJA), and current law (post-TCJA). + +# Defining the Reform ## Child Tax Credit (CTC) -The FFA would expand the CTC from $1,000 to $4,200 (up to age five) and $3,000 (age six to 17), up to six children per filer. It phases in from $0 to $20,000 of modified adjusted gross income (the CTC also phases in under current law). It also phases out at 5% for filers with income over $200,000 ($400,000 joint), as it is for 2018–2025 under the Tax Cuts and Jobs Act (TCJA); this is scheduled to revert to $75,000 ($110,000 joint) in 2026. +The FFA expands the CTC from $1,000 to $4,200 for children up to age five and $3,000 for children ages six to 17, up to six children per filer. It phases in from $0 to $20,000 of earnings and phases out at 5% above $200,000 ($400,000 joint), retaining the TCJA thresholds of 2018–2025. Under current law in 2026, the threshold would revert to $75,000 ($110,000 joint). + +## Pregnant Mother’s Credit + +The FFA adds a pregnant mother’s credit of up to $2,800 for each newborn. It phases in until $10,000 of earnings. -## Pregnant mother’s credit +## Reform of the Earned Income Tax Credit (EITC) -The FFA includes a pregnant mother’s credit, providing up to $2,800 for each newborn child which is phased-in for earnings until $10,000. +The FFA consolidates eight existing EITC household types (single/married and 0/1/2/3+ children) into four (single/married and 0/1+ children). The phase-in rate remains 7.65% for households without children and 34% for those with children. The phase-out rate becomes 10% for households without children and 25% for households with children, compared to 7.65% and up to 21.06% today. -## Reform the Earned Income Tax Credit (EITC) +## Repeal of Head of Household Filing Status -The FFA consolidates the EITC structure from eight household types (single/joint and 0/1/2/3+ children) to four (single/joint and 0/1+ children). It phases in at 7.65% for households without children (as current law does) and 34% for households with children (as current law does for households with one child). It phases out at 10% for households without children (compared to 7.65% today) and 25% for households with children (compared to 15.98% for households with one child, or 21.06% for households with two or more children today). +The FFA repeals head of household filing status, which increases tax thresholds for single parents under current policy. -Table 2: EITC reform parameters[^1] -[^1]: Italicized parameters are derived from other parameters. +## Repeal of Dependent Exemptions -| Marital Status | Children | Phase-in Rate | Phase-in Earnings Range | Maximum Credit | Phase-out AGI Threshold | Phase-out Rate | AGI Limit | -| -------------- | ------------- | ------------- | ----------------------- | -------------- | ----------------------- | -------------- | --------- | -| Single | No children | 7.65% | $9,150 | $700 | $10,000 | 10% | $17,000 | -| Single | With children | 34% | $12,647 | $4,300 | $33,000 | 25% | $50,200 | -| Married | No children | 7.65% | $18,301 | $1,400 | $20,000 | 10% | $34,000 | -| Married | With children | 34% | $14,706 | $5,000 | $43,000 | 25% | $63,000 | +The TCJA repealed dependent exemptions from 2018 to 2025. Starting in 2026, these exemptions would return at $5,300. The FFA continues their repeal, maintaining the TCJA approach. -## Repeal head of household filing status +## Repeal Child Portion of the Child and Dependent Care Credit (CDCC) -The FFA repeals head of household filing status, which increases tax thresholds for single parents. +The FFA limits the CDCC to dependent care expenses for individuals who are 18 or older and unable to self-care due to disability. Currently, the CDCC is available for children under 13. -## Repeal dependent exemptions +## Cap the State and Local Tax (SALT) Deduction -TCJA repealed all personal and dependent exemptions from 2018 to 2025. Starting in 2026, FFA will continue the TCJA’s dependent exemption (leaving personal exemptions intact), which would otherwise return at [$5,300 in 2026](https://www.law.cornell.edu/uscode/text/26/151#d_5_A). +The $10,000 SALT deduction cap from the TCJA is scheduled to expire in 2026. The FFA would keep the $10,000 cap in place. -## Repeal child portion of the Child and Dependent Care Credit (CDCC) +# Household Impacts of the Family First Act -Under the FFA, the CDCC will only apply for childcare expenses which are incurred for dependents over the age of 18 who are incapable of self care due to disability. Currently, the credit can be claimed for a portion of expenses for household and dependent care services incurred for dependents under the age of thirteen. +Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, this household's net income rises by $1,853. The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. -## Cap the state and local tax (SALT) deduction +This household's experience varies with income. Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. -The $10,000 cap on itemized deductions for state and local taxes, introduced in the TCJA, is scheduled to be lifted in 2026. The FFA would extend this provision. +The reform affects single-parent and married households differently, with variations based on income level and number of children. Figure 1 shows how these impacts vary by household type and income level. -## Household impacts +![Net income changes by household type and income](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) +_Figure 1. Annual change in household net income under the Family First Act by marital status and number of children_ -Using the PolicyEngine US household calculator and Python package, we have examined the impact of the proposed reform on different household compositions. +Single-parent households can see net income decrease by up to $10,000, with the largest reductions occurring at incomes between $300,000 and $400,000. The magnitude of change increases with the number of children in the household. Married households, in contrast, experience net income increases of up to $4,000-$5,000 until their earnings exceed $400,000. Above $600,000, the impact becomes minimal. As with single-parent households, those with more children see larger changes in net income due to the expanded Child Tax Credit. -Looking at single parent and married households with and without childcare expenses, we find that single households face income reductions of up to $10,000 at income levels of $300,000-$400,000 depending on the number of children. Married households experience a positive impact for earnings up to $400,000, peaking at around +$4,000-$5,000, until dropping near zero at incomes above $600,000. For both household types, the presence of more children increases the income due to the expanded CTC. +When households have childcare expenses, the impacts shift. A household with $10,000 in childcare expenses sees up to $3,000 less in net income due to changes in the Child and Dependent Care Credit. Married households maintain net gains until reaching about $420,000 in earnings, after which the gains gradually decline. Single households experience a steeper decline in net income as earnings grow, reflecting the reformed EITC structure designed to reduce marriage penalties. -![](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) +Figure 2 illustrates these patterns for a specific household type across the income distribution. -Due to the CDCC repeal, the presence of $10,000 of childcare expenses decreases net income by a maximum of $3,000. Married households experience a continuous positive impact for earnings up to $420,000 before declining, while single households experience a steeper decline in impact as earnings increase. This steeper decline can be attributed to changes in the earned income tax credit, which aims to reduce potential marriage penalties in the current structure. +![Net income changes across income levels](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) +_Figure 2. Annual change in household net income under the Family First Act by earnings level for a single parent with two children_ -When considering a single parent household of two children, aged five and ten with $30,000 of employment income in Utah, the FFA would increase the total net income by [$1,853](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). This is due to a: +The reform creates substantial changes in marginal tax rates, particularly for households earning under $50,000. As shown in Figure 3, tax rates shift between 30 percentage points lower and 29 percentage points higher than current law. These changes stem from the interaction of various provisions: credits phasing in and out at different income levels, modifications to deductions, and the elimination of head of household filing status. -- $5,395 CTC increase +![Changes in marginal tax rates](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) +_Figure 3. Change in marginal tax rates under the Family First Act by earnings level_ -- $1,688 EITC reduction +# National Impacts of the Family First Act -- $338 Utah EITC reduction +We estimate national impacts using the PolicyEngine US microsimulation model. See Appendix B for methodological details. -- $1,854 tax increase before credits, due to the repeal of dependent exemptions and head of household filing status +## Revenue Effects -This household will experience a [varying positive net income effect](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565) for earnings up to $188,000 after which their net income will decrease gradually to a maximum negative impact of about $5,900 at $350,000 of income. +The FFA raises $24.3 billion in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $171.3 billion, other provisions—particularly maintaining the SALT deduction cap—raise $195.6 billion. Figure 1 shows the revenue impact of each component. -![](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) +![Revenue effects by provision](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) +_Figure 1. Budgetary impact of Family First Act provisions in 2026_ -Due to the interaction of multiple credit programs as well as deductions and filing status changes, the reform [alters marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48792) from between -30 and +29 percentage points, with most fluctuations occurring at earnings levels below $50,000. +Over the 2026-2034 period, the reform raises $534.7 billion, with federal revenue gains growing each year as shown in Figure 2. -![](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) +![Revenue effects over time](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) +_Figure 2. Annual federal budgetary impact, 2025-2034_ -## National impacts +The annual federal impacts are: -To estimate the economic effects, we apply the PolicyEngine US 1.172.0 microsimulation model and our [Enhanced Current Population Survey](https://policyengine.org/us/research/enhanced-cps-beta), comparing against current law (assuming TCJA expires). We do not include any behavioral responses.[^2] +| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | +| ------------------------------ | ---- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------- | +| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | -[^2]: While we assume full CTC takeup, we assume partial EITC takeup based on [this](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/JRC20_Volume3.pdf#page=62) report. +State revenues rise by $3.9 billion in 2026, mainly from state-level credits that match federal amounts. -## Budgetary impacts +## Changes in Income Distribution -In 2026, we project that the FFA would raise [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in revenue, increasing federal revenues by a total of $20.4 billion. The CTC reform costs $171.3 billion (we include the pregnant mother’s credit in the CTC bar); however, the FFA’s consolidations and the retention of the $10,000 SALT cap in 2026 raises $195.6 billion creating a positive budgetary impact.[^3] +The reform affects household incomes across the income distribution, as shown in Figure 3. Net income rises for 36% of people and falls for 16%. The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). -[^3]: Analysis conducted in [this](https://github.com/PolicyEngine/analysis-notebooks/tree/main/us/family_first_act) public GitHub repository using the policyengine-us Python package. +![Distribution of gains and losses](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) +_Figure 3. Share of people with income gains and losses by income decile_ -![](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) +## Poverty Reduction -From 2026 to 2034, we project the FFA would raise $534.7 billion. The annual budgetary surplus will increase each year until 2034. Considering only the federal budgetary impact, the FFA would raise $493.72 over the entire budget window. +The reform reduces poverty by 5.9% overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 4, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. -| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | -| ------------------------------ | ---- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------- | -| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | +![Poverty reduction by age group](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) +_Figure 4. Change in poverty rates by age group_ + +The reform also reduces income inequality, lowering the Gini index by 1.4%. The share of total income held by the top 1% of households falls by 3.1%. + +# Conclusion + +Congressman Blake Moore’s Family First Act modifies multiple tax policies. The bill changes the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and SALT deduction, and it repeals head of household filing status and dependent exemptions. We project that these reforms would raise $534.7 billion from 2026 to 2034, with revenues increasing each year. According to our simulation, the reform raises net income for 36% of the population and reduces poverty by 5.9% (and child poverty by 10.7%). + +# Appendix A: Detailed Policy Comparison + +## Table A.1: FFA Compared to Current Policy and Current Law (2026) + +| Program | Feature | Current Policy (2023–25) | Current Law (2026) | FFA | +| ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | +| Child Tax Credit | Maximum Credit Amount | $2,000 per child | $1,000 per child | $4,200 per child under 6; $3,000 per child under 18 | +| Child Tax Credit | Phase-out Threshold | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | +| Child Tax Credit | Phase-out Rate | 5% | 5% | 5% | +| Child Tax Credit | Phase-in Details | Up to $1,400 refundable, phases in at 15% of earnings above $2,500 | Up to $1,000 refundable, phases in at 15% of earnings above $3,000 | Phases in for earnings up to $20,000 at earnings/20,000 rate | +| Child Tax Credit | Child Cap | None | None | Maximum 6 children | +| Pregnant Mother's Credit | Maximum Credit Amount | None | None | $2,800 per newborn child | +| Pregnant Mother's Credit | Phase-in Requirements | None | None | Phases in for earnings up to $10,000 at earnings/10,000 rate | +| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | Single/Married: 7.65% (0 children); 34% (with children) | +| EITC | Maximum Credit | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | +| EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | +| EITC | Phase-out Start | Single: $10,620 (0 children), $23,350 (1+ children); Married: $17,730 (0 children), $30,470 (1+ children) | Single: $10,830 (0 children), $23,810 (1+ children); Married: $18,080 (0 children), $31,060 (1+ children) | Single: $10,000 (0 children), $33,000 (with children); Married: $20,000 (0 children), $43,000 (with children) | +| Child and Dependent Care Credit | Eligibility | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Only dependents/spouse physically/mentally incapable of self-care who are 18+ | +| Dependent Exemptions | Amount | $0 | $5,300 | $0 | +| Head of Household Status | Status | Active | Active | Repealed | +| SALT Deduction | Cap | $10,000 per filer | Uncapped | $10,000 per filer | + +[^1]: While we assume full CTC takeup, we assume partial EITC takeup based on [this report](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/JRC20_Volume3.pdf#page=62). + +[^2]: Analysis conducted in [this public GitHub repository](https://github.com/PolicyEngine/analysis-notebooks/tree/main/us/family_first_act) using the policyengine-us Python package. + +[^3]: The distributional impacts include changes from state-level tax credits, such as the Utah EITC, which matches 20% of the federal credit in 2026. -![](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) +# Appendix B: Simulation Methodology -State revenues would increase by $3.9 billion in 2026 under the FFA, partially due to states matching the federal EITC and CTC under available state tax credits. +## Data and Software -## Distributional impacts +This analysis uses: -The Family First Act would [increase the net income](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) of 36% of the population, with those in the ninth decile most likely to experience an increase in household income (47%)[^4]. Additionally, it would reduce the income of 16% of people, disproportionately those in the top income decile (49%). +- PolicyEngine US version 1.172.0 microsimulation model +- Enhanced Current Population Survey microdata +- 2026 tax parameters from current law +- GitHub repository documenting code and parameters -[^4]: The distributional impacts include impacts from State tax changes such as the Utah EITC which matches the federal credit by 20% in 2026. +## Key Assumptions -![](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) +The simulation: -## Poverty and inequality impacts +- Compares FFA to current law baseline after TCJA expiration +- Assumes no behavioral responses to policy changes +- Models full CTC takeup +- Models partial EITC takeup based on IRS Taxpayer Advocate Service estimates +- Includes state tax interactions where credits match federal amounts +- Projects parameters forward using statutory inflation adjustments -Our analysis finds that the FFA would [reduce the poverty rate](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) by 5.9% (1.5 percentage point reduction in the Supplemental Poverty Measure) in 2026. It would reduce child poverty by 10.7% and senior and working age adult poverty by 0.8% and 4.8% respectively, while reducing deep poverty by [2.1%.](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.deep.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) +## Margin of Error -![](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) +Results are point estimates from survey microdata. Sampling error and modeling uncertainty affect precision. Key sources of uncertainty include: -The reform would also reduce the Gini index of income inequality by [1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) in 2026, with the share of net income held by the top 1% falling by 3.1%. +- CPS sampling variation +- Income and demographic reporting error +- Tax filing unit construction from households +- Benefit takeup assumptions +- Economic projection uncertainty -## Conclusion +## Code and Data Access -Congressman Blake Moore’s Family First Act proposes changes to an array of tax policies in the United States. Key reforms include restructuring the Earned Income Tax Credit, introducing a newly tiered Child Tax Credit system, modifying the CDCC as well as the SALT deduction, and eliminating head of household filing status and the dependent exemption. Our projections suggest the FFA would raise $534.7 billion over the 2025–2034 budget window with revenues increasing annually. The reform increases net income for 36% of the population, reducing overall poverty rates by 5.9% and child poverty by 10.7%. +The complete analysis code is available in a public GitHub repository. The PolicyEngine US package provides the tax-benefit calculator and Enhanced CPS provides the microdata. From f6bdc71bfa67ee52f71f3feedb93ef0b0c92a39d Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 00:30:27 +0100 Subject: [PATCH 06/13] format and graph --- src/posts/articles/family-first-act.md | 28 +++++++++++++++----------- 1 file changed, 16 insertions(+), 12 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index 8e2efbb9b..f8273470f 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -42,7 +42,7 @@ The $10,000 SALT deduction cap from the TCJA is scheduled to expire in 2026. The # Household Impacts of the Family First Act -Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, this household's net income rises by $1,853. The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. +Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565. The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. This household's experience varies with income. Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. @@ -55,12 +55,12 @@ Single-parent households can see net income decrease by up to $10,000, with the When households have childcare expenses, the impacts shift. A household with $10,000 in childcare expenses sees up to $3,000 less in net income due to changes in the Child and Dependent Care Credit. Married households maintain net gains until reaching about $420,000 in earnings, after which the gains gradually decline. Single households experience a steeper decline in net income as earnings grow, reflecting the reformed EITC structure designed to reduce marriage penalties. -Figure 2 illustrates these patterns for a specific household type across the income distribution. +Figure 2 illustrates these patterns for a specific household type [across the income distribution](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). ![Net income changes across income levels](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) _Figure 2. Annual change in household net income under the Family First Act by earnings level for a single parent with two children_ -The reform creates substantial changes in marginal tax rates, particularly for households earning under $50,000. As shown in Figure 3, tax rates shift between 30 percentage points lower and 29 percentage points higher than current law. These changes stem from the interaction of various provisions: credits phasing in and out at different income levels, modifications to deductions, and the elimination of head of household filing status. +The reform creates [substantial changes in marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565), particularly for households earning under $50,000. As shown in Figure 3, tax rates shift between 30 percentage points lower and 29 percentage points higher than current law. These changes stem from the interaction of various provisions: credits phasing in and out at different income levels, modifications to deductions, and the elimination of head of household filing status. ![Changes in marginal tax rates](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) _Figure 3. Change in marginal tax rates under the Family First Act by earnings level_ @@ -69,14 +69,14 @@ _Figure 3. Change in marginal tax rates under the Family First Act by earnings l We estimate national impacts using the PolicyEngine US microsimulation model. See Appendix B for methodological details. -## Revenue Effects +## Federal Revenue Effects -The FFA raises $24.3 billion in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $171.3 billion, other provisions—particularly maintaining the SALT deduction cap—raise $195.6 billion. Figure 1 shows the revenue impact of each component. +The FFA raises [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $170 billion, other provisions—particularly maintaining the SALT deduction cap—raise $111.2 billion. Figure 1 shows the revenue impact of each component. -![Revenue effects by provision](https://cdn-images-1.medium.com/max/2648/0*xLHsQ1vndE71mOCv) +![Revenue effects by provision](https://cdn-images-1.medium.com/max/2000/1*1WWqPxqlKr2yN3ds9BZzfQ.png) _Figure 1. Budgetary impact of Family First Act provisions in 2026_ -Over the 2026-2034 period, the reform raises $534.7 billion, with federal revenue gains growing each year as shown in Figure 2. +Over the 2026-2034 period, the reform raises $494.4 billion, with federal revenue gains growing each year as shown in Figure 2. ![Revenue effects over time](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) _Figure 2. Annual federal budgetary impact, 2025-2034_ @@ -85,25 +85,29 @@ The annual federal impacts are: | Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | | ------------------------------ | ---- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------- | -| Federal Budgetary Impact ($bn) | 0.0 | -20.36 | -27.22 | -34.89 | -42.98 | -52.34 | -62.3 | -72.97 | -83.97 | -97.29 | -493.72 | +| Federal Budgetary Impact ($bn) | 0.0 | -20.4 | -27.2 | -34.9 | -43.0 | -52.3 | -62.3 | -73.0 | -84.0 | -97.3 | -494.4 | -State revenues rise by $3.9 billion in 2026, mainly from state-level credits that match federal amounts. +## State Revenue Effects + +State revenues rise by $3.9 billion in 2026, mainly from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisianna (5%), and others provide income tax credits, mathcing the federal EITC amount by a varying percentage. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state specific child and dependent care income tax credits.[^1] + +[^1]: [For more detailed information about state-level credit imapcts, see our State EITC and CTC Impact Calculator](https://us-state-eitcs-ctcs.streamlit.app/) ## Changes in Income Distribution -The reform affects household incomes across the income distribution, as shown in Figure 3. Net income rises for 36% of people and falls for 16%. The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). +The reform affects household incomes across the income distribution, as shown in Figure 3. [Net income rises for 36% of people and falls for 16%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2). The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). ![Distribution of gains and losses](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) _Figure 3. Share of people with income gains and losses by income decile_ ## Poverty Reduction -The reform reduces poverty by 5.9% overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 4, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. +The reform [reduces poverty by 5.9%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 4, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. ![Poverty reduction by age group](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) _Figure 4. Change in poverty rates by age group_ -The reform also reduces income inequality, lowering the Gini index by 1.4%. The share of total income held by the top 1% of households falls by 3.1%. +The reform also reduces income inequality, [lowering the Gini index by 1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2). The share of total income held by the top 1% of households falls by 3.1%. # Conclusion From 123ac4a424a613cee4c1a727e2e6b8e5ae0ff97c Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 00:56:03 +0100 Subject: [PATCH 07/13] link format --- src/posts/articles/family-first-act.md | 10 +++++----- 1 file changed, 5 insertions(+), 5 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index f8273470f..182f1fcb8 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -42,7 +42,7 @@ The $10,000 SALT deduction cap from the TCJA is scheduled to expire in 2026. The # Household Impacts of the Family First Act -Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565. The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. +Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, [household net income increases by $1,835](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. This household's experience varies with income. Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. @@ -120,16 +120,16 @@ Congressman Blake Moore’s Family First Act modifies multiple tax policies. The | Program | Feature | Current Policy (2023–25) | Current Law (2026) | FFA | | ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | | Child Tax Credit | Maximum Credit Amount | $2,000 per child | $1,000 per child | $4,200 per child under 6; $3,000 per child under 18 | -| Child Tax Credit | Phase-out Threshold | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | +| Child Tax Credit | Phase-out Start | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | | Child Tax Credit | Phase-out Rate | 5% | 5% | 5% | | Child Tax Credit | Phase-in Details | Up to $1,400 refundable, phases in at 15% of earnings above $2,500 | Up to $1,000 refundable, phases in at 15% of earnings above $3,000 | Phases in for earnings up to $20,000 at earnings/20,000 rate | | Child Tax Credit | Child Cap | None | None | Maximum 6 children | | Pregnant Mother's Credit | Maximum Credit Amount | None | None | $2,800 per newborn child | | Pregnant Mother's Credit | Phase-in Requirements | None | None | Phases in for earnings up to $10,000 at earnings/10,000 rate | -| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | Single/Married: 7.65% (0 children); 34% (with children) | -| EITC | Maximum Credit | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | -| EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | +| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (with children) | +| EITC | Maximum Credit Amount | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | | EITC | Phase-out Start | Single: $10,620 (0 children), $23,350 (1+ children); Married: $17,730 (0 children), $30,470 (1+ children) | Single: $10,830 (0 children), $23,810 (1+ children); Married: $18,080 (0 children), $31,060 (1+ children) | Single: $10,000 (0 children), $33,000 (with children); Married: $20,000 (0 children), $43,000 (with children) | +| EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | | Child and Dependent Care Credit | Eligibility | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Only dependents/spouse physically/mentally incapable of self-care who are 18+ | | Dependent Exemptions | Amount | $0 | $5,300 | $0 | | Head of Household Status | Status | Active | Active | Repealed | From 8a7182c0fb4ed3d247a2316e9236122a254bdedc Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 01:03:52 +0100 Subject: [PATCH 08/13] conclusion format --- src/posts/articles/family-first-act.md | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index 182f1fcb8..788b95e6c 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -111,7 +111,7 @@ The reform also reduces income inequality, [lowering the Gini index by 1.4%](htt # Conclusion -Congressman Blake Moore’s Family First Act modifies multiple tax policies. The bill changes the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and SALT deduction, and it repeals head of household filing status and dependent exemptions. We project that these reforms would raise $534.7 billion from 2026 to 2034, with revenues increasing each year. According to our simulation, the reform raises net income for 36% of the population and reduces poverty by 5.9% (and child poverty by 10.7%). +Congressman Blake Moore’s Family First Act modifies multiple tax policies. The bill changes the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and SALT deduction, and it repeals head of household filing status and dependent exemptions. We project that these reforms would raise $494.4 billion in federal revenues from 2026 to 2034, with the amount increasing annually. According to our simulation, the reform raises net income for 36% of the population and reduces poverty by 5.9% (and child poverty by 10.7%). # Appendix A: Detailed Policy Comparison From 385a8112ac636c8de060afd171f126dd813a5370 Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 01:05:41 +0100 Subject: [PATCH 09/13] make format --- src/posts/articles/family-first-act.md | 10 +++++----- 1 file changed, 5 insertions(+), 5 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index 788b95e6c..aae4b37e5 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -83,8 +83,8 @@ _Figure 2. Annual federal budgetary impact, 2025-2034_ The annual federal impacts are: -| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | -| ------------------------------ | ---- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------- | +| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | +| ------------------------------ | ---- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ------ | | Federal Budgetary Impact ($bn) | 0.0 | -20.4 | -27.2 | -34.9 | -43.0 | -52.3 | -62.3 | -73.0 | -84.0 | -97.3 | -494.4 | ## State Revenue Effects @@ -120,14 +120,14 @@ Congressman Blake Moore’s Family First Act modifies multiple tax policies. The | Program | Feature | Current Policy (2023–25) | Current Law (2026) | FFA | | ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | | Child Tax Credit | Maximum Credit Amount | $2,000 per child | $1,000 per child | $4,200 per child under 6; $3,000 per child under 18 | -| Child Tax Credit | Phase-out Start | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | +| Child Tax Credit | Phase-out Start | $200,000 ($400,000 joint) | $75,000 ($110,000 joint) | $200,000 ($400,000 joint) | | Child Tax Credit | Phase-out Rate | 5% | 5% | 5% | | Child Tax Credit | Phase-in Details | Up to $1,400 refundable, phases in at 15% of earnings above $2,500 | Up to $1,000 refundable, phases in at 15% of earnings above $3,000 | Phases in for earnings up to $20,000 at earnings/20,000 rate | | Child Tax Credit | Child Cap | None | None | Maximum 6 children | | Pregnant Mother's Credit | Maximum Credit Amount | None | None | $2,800 per newborn child | | Pregnant Mother's Credit | Phase-in Requirements | None | None | Phases in for earnings up to $10,000 at earnings/10,000 rate | -| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (with children) | -| EITC | Maximum Credit Amount | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | +| EITC | Phase-in Rate | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (1 child); 40% (2 children); 45% (3+ children) | 7.65% (0 children); 34% (with children) | +| EITC | Maximum Credit Amount | $649 (0 children); $4,328 (1 child); $7,152 (2 children); $8,046 (3+ children) | $662 (0 children); $4,413 (1 child); $7,292 (2 children); $8,204 (3+ children) | Single: $700 (0 children), $4,300 (with children); Married: $1,400 (0 children), $5,000 (with children) | | EITC | Phase-out Start | Single: $10,620 (0 children), $23,350 (1+ children); Married: $17,730 (0 children), $30,470 (1+ children) | Single: $10,830 (0 children), $23,810 (1+ children); Married: $18,080 (0 children), $31,060 (1+ children) | Single: $10,000 (0 children), $33,000 (with children); Married: $20,000 (0 children), $43,000 (with children) | | EITC | Phase-out Rate | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 7.65% (0 children); 15.98% (1 child); 21.06% (2+ children) | 10% (0 children); 25% (with children) | | Child and Dependent Care Credit | Eligibility | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Children under 13 and dependents/spouse physically/mentally incapable of self-care | Only dependents/spouse physically/mentally incapable of self-care who are 18+ | From 7a1bda7fd46c707f2175ffe001c46687198d2daf Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 01:30:20 +0100 Subject: [PATCH 10/13] minor --- src/posts/articles/family-first-act.md | 1 + 1 file changed, 1 insertion(+) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index aae4b37e5..b7df8e65d 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,4 +1,5 @@ On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act (FFA)](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), which would reform several tax provisions starting in 2026 after the Tax Cuts and Jobs Act expires. This analysis uses PolicyEngine's microsimulation model to estimate its impacts on household incomes, poverty, inequality, and federal revenue. +The introduced changes include: - **Child Tax Credit**: Increases amounts to $4,200 (up to age five) and $3,000 (ages six to 17), up to six children. Introduces a phase-in from $0 to $20,000 of earnings, continues a phase-out at $200,000 ($400,000 joint). - **Pregnant Mother’s Credit**: Offers up to $2,800 per newborn, with a phase-in until $10,000 of earnings. From 2907d69706ad28124afa3cd0023616763615814e Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 01:33:53 +0100 Subject: [PATCH 11/13] federal value --- src/posts/articles/family-first-act.md | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index b7df8e65d..f4f00d2cb 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -72,7 +72,7 @@ We estimate national impacts using the PolicyEngine US microsimulation model. Se ## Federal Revenue Effects -The FFA raises [$24.3 billion](https://policyengine.org/us/policy?focus=policyOutput.policyBreakdown&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $170 billion, other provisions—particularly maintaining the SALT deduction cap—raise $111.2 billion. Figure 1 shows the revenue impact of each component. +The FFA raises [$20.4 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $170 billion, other provisions—particularly maintaining the SALT deduction cap—raise $111.2 billion. Figure 1 shows the revenue impact of each component. ![Revenue effects by provision](https://cdn-images-1.medium.com/max/2000/1*1WWqPxqlKr2yN3ds9BZzfQ.png) _Figure 1. Budgetary impact of Family First Act provisions in 2026_ From 9a316849e61768f8f35e1dde7bd4ddc267b1cf92 Mon Sep 17 00:00:00 2001 From: PavelMakarchuk Date: Fri, 17 Jan 2025 01:50:46 +0100 Subject: [PATCH 12/13] minor --- src/posts/articles/family-first-act.md | 4 ++-- 1 file changed, 2 insertions(+), 2 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index f4f00d2cb..e4790cddd 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -90,9 +90,9 @@ The annual federal impacts are: ## State Revenue Effects -State revenues rise by $3.9 billion in 2026, mainly from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisianna (5%), and others provide income tax credits, mathcing the federal EITC amount by a varying percentage. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state specific child and dependent care income tax credits.[^1] +State revenues rise by $3.9 billion in 2026, largely from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisianna (5%), and others provide income tax credits that matching the federal EITC amount by varying percentages. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state-specific Child and Dependent Care Income Tax Credits.[^1] -[^1]: [For more detailed information about state-level credit imapcts, see our State EITC and CTC Impact Calculator](https://us-state-eitcs-ctcs.streamlit.app/) +[^1]: [For more detailed information about state-level credit impacts, see our State EITC and CTC Impact Calculator](https://us-state-eitcs-ctcs.streamlit.app/) ## Changes in Income Distribution From 9043505af5f6efdab375d34c9a1d5b1f4acba2aa Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Thu, 16 Jan 2025 21:54:17 -0800 Subject: [PATCH 13/13] Last fixes --- src/posts/articles/family-first-act.md | 128 ++++++++++--------------- src/posts/posts.json | 2 +- 2 files changed, 49 insertions(+), 81 deletions(-) diff --git a/src/posts/articles/family-first-act.md b/src/posts/articles/family-first-act.md index e4790cddd..81339c722 100644 --- a/src/posts/articles/family-first-act.md +++ b/src/posts/articles/family-first-act.md @@ -1,122 +1,99 @@ -On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act (FFA)](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), which would reform several tax provisions starting in 2026 after the Tax Cuts and Jobs Act expires. This analysis uses PolicyEngine's microsimulation model to estimate its impacts on household incomes, poverty, inequality, and federal revenue. -The introduced changes include: +On January 13th, Congressman Blake Moore (R-UT) [introduced](https://blakemoore.house.gov/media/press-releases/congressman-blake-moore-introduces-legislation-to-enhance-the-child-tax-credit-and-provide-tax-relief-for-parents) the [Family First Act (FFA)](https://blakemoore.house.gov/imo/media/doc/ctc_bill_text.pdf), which would reform several tax provisions starting in 2026 after the Tax Cuts and Jobs Act expires. The reform primarily expands the Child Tax Credit and extends the cap on state and local tax deductions, while also repealing dependent exemptions and head of household filing status, and reforming the Earned Income Tax Credit and Child and Dependent Care Credit. This analysis uses PolicyEngine's microsimulation model to estimate its impacts on household incomes, poverty, inequality, and federal revenue. -- **Child Tax Credit**: Increases amounts to $4,200 (up to age five) and $3,000 (ages six to 17), up to six children. Introduces a phase-in from $0 to $20,000 of earnings, continues a phase-out at $200,000 ($400,000 joint). -- **Pregnant Mother’s Credit**: Offers up to $2,800 per newborn, with a phase-in until $10,000 of earnings. -- **EITC**: Consolidates the structure from eight to four household types, phases in at existing rates for no children (7.65%) and one child (34%), and adjusts phase-outs. -- **Head of Household Filing Status**: Repeals the status entirely. -- **Dependent Exemptions**: Continues the dependent exemption repeal from the TCJA period into 2026 and beyond. -- **Child and Dependent Care Credit**: Restricts eligibility to dependents aged 18+ who cannot self-care due to disability. -- **SALT Deduction**: Retains the $10,000 deduction cap in 2026 and beyond. +## Defining the Reform -See **Table A.1** in the Appendix for a detailed comparison of FFA, current policy (under TCJA), and current law (post-TCJA). +Here we describe each provision of the Family First Act. See **Table A.1** in the Appendix for a detailed comparison of FFA, current policy (under TCJA), and current law (post-TCJA). -# Defining the Reform - -## Child Tax Credit (CTC) +### Child Tax Credit (CTC) The FFA expands the CTC from $1,000 to $4,200 for children up to age five and $3,000 for children ages six to 17, up to six children per filer. It phases in from $0 to $20,000 of earnings and phases out at 5% above $200,000 ($400,000 joint), retaining the TCJA thresholds of 2018–2025. Under current law in 2026, the threshold would revert to $75,000 ($110,000 joint). -## Pregnant Mother’s Credit +### Pregnant Mother’s Credit The FFA adds a pregnant mother’s credit of up to $2,800 for each newborn. It phases in until $10,000 of earnings. -## Reform of the Earned Income Tax Credit (EITC) +### Reform of the Earned Income Tax Credit (EITC) The FFA consolidates eight existing EITC household types (single/married and 0/1/2/3+ children) into four (single/married and 0/1+ children). The phase-in rate remains 7.65% for households without children and 34% for those with children. The phase-out rate becomes 10% for households without children and 25% for households with children, compared to 7.65% and up to 21.06% today. -## Repeal of Head of Household Filing Status +### Repeal of Head of Household Filing Status The FFA repeals head of household filing status, which increases tax thresholds for single parents under current policy. -## Repeal of Dependent Exemptions +### Repeal of Dependent Exemptions The TCJA repealed dependent exemptions from 2018 to 2025. Starting in 2026, these exemptions would return at $5,300. The FFA continues their repeal, maintaining the TCJA approach. -## Repeal Child Portion of the Child and Dependent Care Credit (CDCC) +### Repeal Child Portion of the Child and Dependent Care Credit (CDCC) The FFA limits the CDCC to dependent care expenses for individuals who are 18 or older and unable to self-care due to disability. Currently, the CDCC is available for children under 13. -## Cap the State and Local Tax (SALT) Deduction +### Cap the State and Local Tax (SALT) Deduction The $10,000 SALT deduction cap from the TCJA is scheduled to expire in 2026. The FFA would keep the $10,000 cap in place. -# Household Impacts of the Family First Act +## Household Impacts of the Family First Act Consider a single parent with two children, ages five and ten, earning $30,000 in Utah. Under the FFA, [household net income increases by $1,835](https://policyengine.org/us/household?focus=householdOutput.netIncome&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). The increase comes from a $5,395 expansion in the Child Tax Credit, partially offset by reductions in tax credits and increased tax liability. The federal EITC falls by $1,688, and the Utah EITC, which matches the federal credit, decreases by $338. The household pays $1,854 more in tax before credits due to the elimination of both dependent exemptions and head of household filing status. -This household's experience varies with income. Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. - -The reform affects single-parent and married households differently, with variations based on income level and number of children. Figure 1 shows how these impacts vary by household type and income level. +Figure 1 shows how this household's experience [varies with income](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). Net income rises until earnings reach $188,000, after which the gains diminish and eventually become losses. At $350,000 of earnings, the household faces its largest reduction in net income of $5,900. -![Net income changes by household type and income](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) -_Figure 1. Annual change in household net income under the Family First Act by marital status and number of children_ +![Figure 1: FFA effect on net income for a single parent in Utah with two children ages 5 and 10](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) -Single-parent households can see net income decrease by up to $10,000, with the largest reductions occurring at incomes between $300,000 and $400,000. The magnitude of change increases with the number of children in the household. Married households, in contrast, experience net income increases of up to $4,000-$5,000 until their earnings exceed $400,000. Above $600,000, the impact becomes minimal. As with single-parent households, those with more children see larger changes in net income due to the expanded Child Tax Credit. +Figure 2 shows how the reform [alters the household's marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565), particularly if they earn under $50,000, where more programs change such as the Earned Income Tax Credit and dependent exemptions. -When households have childcare expenses, the impacts shift. A household with $10,000 in childcare expenses sees up to $3,000 less in net income due to changes in the Child and Dependent Care Credit. Married households maintain net gains until reaching about $420,000 in earnings, after which the gains gradually decline. Single households experience a steeper decline in net income as earnings grow, reflecting the reformed EITC structure designed to reduce marriage penalties. +![Figure 2: FFA effect on marginal tax rates for a single parent in Utah with two children ages 5 and 10](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) -Figure 2 illustrates these patterns for a specific household type [across the income distribution](https://policyengine.org/us/household?focus=householdOutput.earnings&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565). +The reform's effects vary with marital status, number of children, income, and childcare expenses. Figure 3 shows how these factors affect the impact to net income, holding child ages at ages 6 to 12. These impacts differ from those in Figure 1 as they assume (a) all children are age 6 and 12 (rather than 5 and 10), and (b) the household is in Texas, which has no income tax or credits (rather than Utah). -![Net income changes across income levels](https://cdn-images-1.medium.com/max/3200/0*x8MiEDhoh0QJu5gI) -_Figure 2. Annual change in household net income under the Family First Act by earnings level for a single parent with two children_ +![Figure 3: FFA effect on net income by marital status, children, income, and childcare expenses](https://cdn-images-1.medium.com/max/2656/0*lKs_ij6_V1sEyJdU) -The reform creates [substantial changes in marginal tax rates](https://policyengine.org/us/household?focus=householdOutput.mtr&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2&household=48565), particularly for households earning under $50,000. As shown in Figure 3, tax rates shift between 30 percentage points lower and 29 percentage points higher than current law. These changes stem from the interaction of various provisions: credits phasing in and out at different income levels, modifications to deductions, and the elimination of head of household filing status. +Single-parent households can see net income decrease by up to $10,000, or more with childcare expenses, with the largest reductions occurring at incomes between $300,000 and $400,000. The magnitude of change increases with the number of children in the household. Married households, in contrast, experience net income increases of up to $4,000-$5,000 until their earnings exceed $400,000. As with single-parent households, those with more children see larger changes in net income due to the expanded Child Tax Credit. -![Changes in marginal tax rates](https://cdn-images-1.medium.com/max/3200/0*karwlvhwpukVHknG) -_Figure 3. Change in marginal tax rates under the Family First Act by earnings level_ +When households have childcare expenses, the impacts shift. A household with $10,000 in childcare expenses sees up to $3,000 less in net income due to changes in the Child and Dependent Care Credit. Married households maintain net gains until reaching about $420,000 in earnings, after which the gains gradually decline. Single households experience a steeper decline in net income as earnings grow, reflecting the reformed EITC structure. -# National Impacts of the Family First Act +## National Impacts of the Family First Act We estimate national impacts using the PolicyEngine US microsimulation model. See Appendix B for methodological details. -## Federal Revenue Effects - -The FFA raises [$20.4 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in net revenue in 2026. While the Child Tax Credit expansion (including the pregnant mother's credit) reduces revenue by $170 billion, other provisions—particularly maintaining the SALT deduction cap—raise $111.2 billion. Figure 1 shows the revenue impact of each component. +### Federal Revenue Effects -![Revenue effects by provision](https://cdn-images-1.medium.com/max/2000/1*1WWqPxqlKr2yN3ds9BZzfQ.png) -_Figure 1. Budgetary impact of Family First Act provisions in 2026_ +The FFA raises [$20 billion](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2) in net federal revenue in 2026. +While the Child Tax Credit expansion (including the pregnant mother's credit) costs $170 billion, other provisions raise $190 billion-—primarily the SALT deduction cap which raises $111 billion. Figure 4 shows the revenue impact of each provision. -Over the 2026-2034 period, the reform raises $494.4 billion, with federal revenue gains growing each year as shown in Figure 2. +![Figure 4: Federal budgetary impacts of Family First Act provisions in 2026](https://cdn-images-1.medium.com/max/2000/1*1WWqPxqlKr2yN3ds9BZzfQ.png) -![Revenue effects over time](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) -_Figure 2. Annual federal budgetary impact, 2025-2034_ +Over the 2025-2034 budget window, the reform raises $494 billion, with federal revenue gains growing each year as shown in Figure 5. -The annual federal impacts are: +![Figure 5: Federal budgetary impacts of Family First Act from 2025 to 2034](https://cdn-images-1.medium.com/max/2640/0*mwlUL3jthCnKvis8) -| Year | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | Total | -| ------------------------------ | ---- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ------ | -| Federal Budgetary Impact ($bn) | 0.0 | -20.4 | -27.2 | -34.9 | -43.0 | -52.3 | -62.3 | -73.0 | -84.0 | -97.3 | -494.4 | +### State Revenue Effects -## State Revenue Effects +State revenues rise by [$3.9 billion in 2026](https://policyengine.org/us/policy?focus=policyOutput.budgetaryImpact.overall&reform=73465®ion=enhanced_us&timePeriod=2026&baseline=2), largely from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisiana (5%), and others provide income tax credits that matching the federal EITC amount by varying percentages. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state-specific Child and Dependent Care Income Tax Credits. We consider these state impacts in the following distributional analysis. -State revenues rise by $3.9 billion in 2026, largely from state-level credits that match federal amounts. States such as Colorado (25%), Connecticut (40%), Louisianna (5%), and others provide income tax credits that matching the federal EITC amount by varying percentages. Additionally, states such as Arkansas (20%), Colorado (up to 50%), Delaware (50%), and others match the federal CDCC amount under state-specific Child and Dependent Care Income Tax Credits.[^1] +### Changes in Income Distribution -[^1]: [For more detailed information about state-level credit impacts, see our State EITC and CTC Impact Calculator](https://us-state-eitcs-ctcs.streamlit.app/) +The reform affects household incomes across the income distribution, as shown in Figure 6. [Net income rises for 36% of people and falls for 16%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2). The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). -## Changes in Income Distribution +![Figure 6: Distribution of gains and losses](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) -The reform affects household incomes across the income distribution, as shown in Figure 3. [Net income rises for 36% of people and falls for 16%](https://policyengine.org/us/policy?focus=policyOutput.winnersAndLosers.incomeDecile&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2). The ninth income decile sees the highest share of households with income gains (47%), while the top decile has the highest share with income losses (49%). +### Poverty Reduction -![Distribution of gains and losses](https://cdn-images-1.medium.com/max/3200/0*f-gK9uscrzd-5170) -_Figure 3. Share of people with income gains and losses by income decile_ +The reform [reduces poverty by 5.9%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 7, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. -## Poverty Reduction - -The reform [reduces poverty by 5.9%](https://policyengine.org/us/policy?focus=policyOutput.povertyImpact.regular.byAge&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) overall (a 1.5 percentage point reduction in the Supplemental Poverty Measure). As shown in Figure 4, child poverty falls by 10.7%, while deep poverty—households below half the poverty line—declines by 2.1%. - -![Poverty reduction by age group](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) -_Figure 4. Change in poverty rates by age group_ +![Figure 7: Poverty reduction by age group](https://cdn-images-1.medium.com/max/3200/0*Xp698QhswZMUp5u6) The reform also reduces income inequality, [lowering the Gini index by 1.4%](https://policyengine.org/us/policy?focus=policyOutput.inequalityImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2). The share of total income held by the top 1% of households falls by 3.1%. -# Conclusion +Finally, the reform increases the [prevalence of cliffs](https://policyengine.org/us/policy?focus=policyOutput.cliffImpact&reform=73466®ion=enhanced_us&timePeriod=2026&baseline=2) by 0.07% and reduces the severity of cliffs by 0.2%. + +## Conclusion Congressman Blake Moore’s Family First Act modifies multiple tax policies. The bill changes the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and SALT deduction, and it repeals head of household filing status and dependent exemptions. We project that these reforms would raise $494.4 billion in federal revenues from 2026 to 2034, with the amount increasing annually. According to our simulation, the reform raises net income for 36% of the population and reduces poverty by 5.9% (and child poverty by 10.7%). -# Appendix A: Detailed Policy Comparison +## Appendix A: Detailed Policy Comparison -## Table A.1: FFA Compared to Current Policy and Current Law (2026) +### Table A.1: FFA Compared to Current Policy and Current Law (2026) | Program | Feature | Current Policy (2023–25) | Current Law (2026) | FFA | | ------------------------------- | --------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | @@ -136,35 +113,29 @@ Congressman Blake Moore’s Family First Act modifies multiple tax policies. The | Head of Household Status | Status | Active | Active | Repealed | | SALT Deduction | Cap | $10,000 per filer | Uncapped | $10,000 per filer | -[^1]: While we assume full CTC takeup, we assume partial EITC takeup based on [this report](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/JRC20_Volume3.pdf#page=62). +## Appendix B: Simulation Methodology -[^2]: Analysis conducted in [this public GitHub repository](https://github.com/PolicyEngine/analysis-notebooks/tree/main/us/family_first_act) using the policyengine-us Python package. - -[^3]: The distributional impacts include changes from state-level tax credits, such as the Utah EITC, which matches 20% of the federal credit in 2026. - -# Appendix B: Simulation Methodology - -## Data and Software +### Data and Software This analysis uses: - PolicyEngine US version 1.172.0 microsimulation model - Enhanced Current Population Survey microdata - 2026 tax parameters from current law -- GitHub repository documenting code and parameters +- [This specialized code](https://github.com/PolicyEngine/analysis-notebooks/tree/main/us/family_first_act) -## Key Assumptions +### Key Assumptions The simulation: - Compares FFA to current law baseline after TCJA expiration - Assumes no behavioral responses to policy changes - Models full CTC takeup -- Models partial EITC takeup based on IRS Taxpayer Advocate Service estimates -- Includes state tax interactions where credits match federal amounts -- Projects parameters forward using statutory inflation adjustments +- Models partial EITC takeup based on [IRS Taxpayer Advocate Service estimates](https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/JRC20_Volume3.pdf#page=62) +- Includes state tax interactions where credits match federal amounts; distributional impacts consider state impacts, while budgetary impacts break out federal from state +- Projects parameters forward using statutory inflation adjustments and CBO inflation forecasts -## Margin of Error +### Margin of Error Results are point estimates from survey microdata. Sampling error and modeling uncertainty affect precision. Key sources of uncertainty include: @@ -173,7 +144,4 @@ Results are point estimates from survey microdata. Sampling error and modeling u - Tax filing unit construction from households - Benefit takeup assumptions - Economic projection uncertainty - -## Code and Data Access - -The complete analysis code is available in a public GitHub repository. The PolicyEngine US package provides the tax-benefit calculator and Enhanced CPS provides the microdata. +- Behavioral responses diff --git a/src/posts/posts.json b/src/posts/posts.json index dd417ba5f..28a524a69 100644 --- a/src/posts/posts.json +++ b/src/posts/posts.json @@ -1049,7 +1049,7 @@ { "title": "Analysis of the Family First Act", "description": "We project that Representative Blake Moore's Child Tax Credit bill would raise revenue and reduce poverty.", - "date": "2025-01-16 09:00:00", + "date": "2025-01-17 09:00:00", "tags": ["us", "policy", "featured"], "authors": ["pavel-makarchuk"], "filename": "family-first-act.md",