Report: Tax reform could impact child tax provisions

Tax breaks for children also took up a smaller share of the more than $1 trillion in preferences in the code in 2012, the report says, falling from 9 percent to 8 percent. The Urban Institute also projects that tax incentives for children will take up even less of a portion of gross domestic product in the years to come.

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“The stakes for children in tax reform are incredibly high,” said First Focus President Bruce Lesley. “If Congress gets it right, we could see real gains on child poverty – if they don’t, forty percent of federal investments in children are at risk.”

Congress extended both the EITC and the child tax credit in the fiscal-cliff deal signed earlier this year.

Both House Ways and Means Chairman Dave Camp (R-Mich.) and Senate Finance Chairman Max Baucus (D-Mont.) have said they are taking a broad look at the code as they push toward tax reform mark-ups this year.

In a speech last week, Sen. Mike Lee (R-Utah) proposed boosting tax incentives for raising a family. Liberal economists have said that rolling back the EITC would help funnel more wealth to the richest taxpayers.

But some Republicans have also expressed concern about fraudulent claims of refundable tax credits like the EITC, and some free-market groups have said the tax breaks reduce incentives to work.

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