It would allow millions more low-income families to claim that credit, her campaign said, by tweaking an income threshold and allowing the refundable credit to be claimed for the first $3,000 that a worker earns. Currently, the refundability kicks in only after the first $3,000 of earnings.
The campaign estimated that the expansions would reduce federal-tax revenue by between $150 billion and $200 billion over 10 years and said the revenue would be made up through her proposed tax increases on high earners and Wall Street traders, among others, and would be phased out for higher earners. Clinton's camp also said in a release that the benefit would serve as a “down payment” on further tax-relief proposals targeted at low- and middle-income workers.
For working families, Clinton said in the release, “This new tax credit will make their lives a little bit easier.”
Clinton has already proposed several steps to help working families with young children defray rising costs of living, including making pre-K education universally available, offering tax credits for out-of-pocket health-care costs and caring for parents or grandparents, and capping the share of their income they would need to pay for child care.
Her Republican opponent, Donald Trump, has also proposed new steps to help families pay for child and elder care. He would allow taxpayers to deduct the average cost of child care from their taxes and establish tax-free savings accounts for dependent care. He also would cut tax rates at nearly every level of the income ladder.
Many analysts expected Clinton to follow suit, at least in part, with a broad-based middle-class tax cut akin to what President Obama promised in the 2008 campaign. Despite criticism, such a cut appears almost certain not to materialize as part of her campaign platform.
Her advisers say Clinton's approach is more targeted to working-class families and, in their view, more progressive, because it is designed to allow even families with very low incomes to take advantage of it. (Trump's plan has drawn criticism for centering on a deduction, not a credit, which means people who already face little tax liability would not benefit much from it.)