What’s the concern with a refundable tax credit? I like the re-use of infrastructure and the strong precedents for prosecuting tax fraud cases that would be automatic if we ran it as a tax incentive program.
> What’s the concern with a refundable tax credit?
It requires the recipient file taxes in a timely manner; is paid ex post facto, which means expenses are being reimbursed in arrears; and requires good money management to last the whole year. Imagine if unemployment were a refundable tax credit: you get it, lump sum, credited against your taxes after you’ve been laid off.
Give the mother one year's worth of check in advance when the kid leaves the hospital (or when adoption is finalized). Then the first year was pre-paid and all subsequent years are pre-paid (from a timing perspective as well) via the taxation system.
It requires the recipient file taxes in a timely manner; is paid ex post facto, which means expenses are being reimbursed in arrears; and requires good money management to last the whole year. Imagine if unemployment were a refundable tax credit: you get it, lump sum, credited against your taxes after you’ve been laid off.