personal exemption – The Surly Subgroup

By Sam Brunson

Picture courtesy of Pixabay. Used under a CC0 1.0 Universal license. (It’s surprisingly hard to find a picture of a family of five without copyright restrictions!)

The conference tax bill follows both the House and the Senate bills in drastically increasing the standard deduction (from current law’s $13,000 in 2018 to $24,000). At the same time, it gets rid of personal exemptions. As Stephanie Hoffer pointed out eight months ago, eliminating personal exemptions would essentially increase taxes on families of four or more people; the more children a family had, the bigger its tax increase.

To fix that problem, the bill doubles the child tax credit from $1,000 to $2,000 per child. In addition, to get Marco Rubio’s vote, the bill provides that up to $1,400 of each child tax credit is refundable.

So do the child tax credits alleviate the problem of eliminating personal exemptions? Sometimes. Continue reading “The Expanded Child Tax Credit Is an Imperfect Replacement for Personal Exemptions” →