Curt Smith: Increased child tax credit will benefit the economy

The burst of blue powder from a gender-reveal golf ball brought joy to the 90-year-old patriarch, signaling his 28th great-grandchild is a boy. Just the day before, he met great-grandchild No. 27 at an annual family gathering, uniting 50 relatives from England and several U.S. states. Yet America’s declining birth rate and waning commitment to family threaten such intergenerational celebrations unless we renew our focus on supporting children.

One promising policy is increasing the child tax credit to $2,500 per child in the “big, beautiful tax bill” recently passed by the U.S. House and now before the Senate. This measure must be included. Pro-family Hoosiers should urge Republican Sen. Todd Young, a key member of the Senate Finance Committee, to champion it. Young has voiced support, but as tough decisions loom, he needs to hear from constituents that this matters.

Once his committee works its will on the bill, Hoosiers need to send a similar message to U.S. Sen. Jim Banks, also a Republican, regarding final Senate approval as the bill heads to President Donald Trump for his signature.

The worldwide birth dearth—a sustained drop in birth rates below the replacement level of 2.1 children per woman—poses economic and social challenges, from aging populations to shrinking workforces. Globally, fertility rates fell from 4.9 in 1960 to 2.3 in 2022, per the World Bank, with countries like Japan (1.3) and South Korea (0.78) facing the steepest declines. In the United States, the fertility rate dropped from 3.7 in 1960 to 1.62 in 2023, driven by delayed childbearing, economic pressures and shifting priorities.

Indiana mirrors this trend. Its 2023 fertility rate was 58.9 per 1,000 women age 15-44, down 15% since 2007, with 79,000 births—the lowest since 1987. If pre-recession rates had held, Indiana would have seen 151,000 more births over the past 16 years.

According to the Ethics and Public Policy Center, 485,670 Indiana families are married with children at home and could benefit from child tax credit expansion, Said another way, 30.1% of Indiana households have kids at home, with 11.3% supporting children under age 6. While less severe than some states, this decline still strains school enrollment and economic growth.

One clear reason for the declining birth rate is economics. The cost of raising a child today is high. The current estimate is approximately $300,000 to raise a child from birth to age 18 for a middle-class family. That is just under $17,000 per year. So raising the current child tax credit to $2,500 annually covers less than 20% of the cost. But it helps, especially in the early, lower-cost, preschool years.

Beyond the obvious support for child-rearing families, there are other benefits. CTC payments are often spent immediately on goods and services, boosting local economies and providing an economic stimulus. In addition, a robust CTC lifts some families out of poverty, improving child outcomes in education, health and future earnings.

Reversing the birth dearth demands cultural, social and economic responses. It begins with sending the message from all centers of society that children are desired, valued, cherished and protected from conception on. This tax bill offers a tangible step, signaling that society values children, as reflected in the federal tax code.

Raising the next generation is costly and requires sacrifices, but the rewards—personal and societal—are immense. Just ask the patriarch, still beaming from that burst of blue, a joy just as sweet if it had been pink. Let’s craft tax policies to spark such smiles for many more generations to come.

America’s and Indiana’s ongoing prosperity and progress depend on renewing our shared commitment to the coming generations.•

__________

Smith is chairman of the Indiana Family Institute and author of “Deicide: Why Eliminating The Deity is Destroying America.” Send comments to [email protected].

Click here for more Forefront columns.