Written by 
Sen. Josh Hawley (R-Mo.) is making a big opening bid in the 2025 tax battle, calling for the child tax credit to increase from a maximum of $2,000 to $5,000 per kid, Axios has learned.
Why it matters: Such a plan could cost $2 trillion to $3 trillion over 10 years. That complicates the math for incoming Senate Majority Leader John Thune (R-S.D.) and House Speaker Mike Johnson (R-La.), who have thin margins to extend President-elect Trump’s signature tax bill.
- After a child is born, Hawley is proposing to let parents claim a credit for the tax year of the pregnancy.
- Hawley’s proposal speaks to the GOP’s desire to adopt pro-family policies and outflank Democrats on anti-poverty programs.
What he’s saying: “These are the people working class, people with families are who elected Donald Trump, and we need to deliver real and meaningful tax relief to them,” Hawley told Axios in an interview about his plan.
- Hawley has talked with Trump and the president-elect’s team about the proposal, and took Vice President-elect JD Vance’s lead on the specific $5,000 number, the senator told Axios.
Zoom in: Hawley wants to apply the credit to payroll taxes, allowing even Americans who do not make enough to pay income taxes to access bigger refunds.
- The plan would also allow families to receive the tax credits in regular installments throughout the year, rather than as a lump sum during tax season.
- It would also do away with the $2,500 income minimum for families to begin accessing the credit, while still requiring employment.
Zoom out: Republicans have been divided over efforts to expand the child tax credit, while Democrats have been largely supportive.
- Hawley was one of just three Senate Republicans who voted this year for a bipartisan tax package that included an expanded CTC. It failed.
- The other hot GOP tax fight is whether Republicans raise or eliminate the $10,000 cap on state and local tax deductions (SALT) they put in place in 2017. Trump has indicated he’s in favor of eliminating the cap.
What he’s saying: In response to potential concerns about the price tag, Hawley emphasized that “these are the folks who delivered us a majority,” and that the plan would be “fantastic for the economy.”
- He also noted people have to be paying taxes to earn the credit, arguing it is not a social assistance program.
The big picture: If Thune gets his way, the proposal would be part of negotiations on a second reconciliation package in 2025.
- The reconciliation process will allow Republicans to pass budget-related measures with a simple majority, avoiding the usual 60-vote filibuster.
- The 2017 Tax Cuts and Jobs Act expires at the end of 2025.