Child Tax Credit history plot in 2023 dollars

child_tax_credit_history_plot_2023.py

import io
from itertools import pairwise

import matplotlib.pyplot as plt
import pandas as pd

# https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-
inflation_table_str = """
year CPI inflation_rate
1997 160.5 2.3%
1998 163.0 1.6%
1999 166.6 2.2%
2000 172.2 3.4%
2001 177.1 2.8%
2002 179.9 1.6%
2003 184.0 2.3%
2004 188.9 2.7%
2005 195.3 3.4%
2006 201.6 3.2%
2007 207.3 2.9%
2008 215.3 3.8%
2009 214.5 -0.4%
2010 218.1 1.6%
2011 224.9 3.2%
2012 229.6 2.1%
2013 233.0 1.5%
2014 236.7 1.6%
2015 237.0 0.1%
2016 240.0 1.3%
2017 245.1 2.1%
2018 251.1 2.4%
2019 255.7 1.8%
2020 258.8 1.2%
2021 271.0 4.7%
2022 292.7 8.0%
2023 304.7 4.1%
""".strip()

inflation_table = pd.read_csv(io.StringIO(inflation_table_str), delim_whitespace=True)

# Child Tax Credit
# https://www.ncsl.org/human-services/child-tax-credit-overview

ctc_by_year = {
    # "Originally, the tax credit was $400 per child younger than age 17 and nonrefundable for most families. "
    1997: 400,
    # "In 1998, the tax credit was increased to $500 per child younger than age 17. "
    1998: 500,
    # "The tax credit amount increased again and was made refundable in 2001 to coordinate with the
    # earned income tax credit. The refundable portion is called the additional child tax credit."
    # Also: https://usafacts.org/articles/who-does-the-child-tax-credit-benefit-the-most/
    # "The credit grew to $1,000 per child in 2001. It also became partially refundable,
    # giving parents access to a portion of the credit left over after paying federal taxes."
    # Also: https://www.cbpp.org/sites/default/files/archive/5-28-03tax3.htm#:~:text=First%2C%20it%20increased%20the%20size,a%20refund%20from%20the%20Treasury.
    # "First, it increased the size of the credit from $500 per child to $600 in 2001 through 2004, $700 in 2005
    # through 2008, $800 in 2009, and $1,000 in 2010. Second, it expanded the refundability of the credit — or the
    # amount in excess of a household's tax liability that can be received as a refund from the Treasury."
    2001: 600,
    # The Jobs and Growth Tax Relief Reconciliation Act of 2003 raised the Child Tax Credit to a maximum
    # of $1,000 per child from $600 per child, beginning in 2003.
    2003: 1000,
    # "The Tax Cuts and Jobs Act of 2017 doubled the tax credit to $2,000 and made limits
    # to the refundable amount of up to $1,400 per child. "
    2017: 2000,
    # "The American Rescue Plan Act of 2021 temporarily expanded the child tax credit for the 2021 tax year to $3,600
    # per child younger than age 6 and $3,000 per child up to age 17."
    2021: 3000,
    # "The federal child tax credit reverted to previous payment levels for the 2022 tax year."
    2022: 2000,
    2024: 2000,  # Add the last year for plotting behavior below. 2023 + 1 due to the range function.
}


new_ctc_by_year = {}


for (start_year, value), (end_year, _) in pairwise(ctc_by_year.items()):
    for year in range(start_year, end_year):
        new_ctc_by_year[year] = value

print(new_ctc_by_year)

for year, value in new_ctc_by_year.items():
    new_ctc_by_year[year] = value * (
        inflation_table["CPI"].max() / inflation_table[inflation_table["year"] == year]["CPI"]
    )

print(new_ctc_by_year)

# Plot the behavior of the child tax credit over time.
plt.title("Child Tax Credit Over Time -- 2023 Dollars")
plt.xlabel("Year")
plt.ylabel("Child Tax Credit ($)")
plt.plot(new_ctc_by_year.keys(), new_ctc_by_year.values(), marker="o")

# Not plot vertial lines and labesl for each Act
height = 600
plt.axvline(1997, color="r", linestyle="--")
plt.text(1997.2, height, "Taxpayer Relief Act (1997)", rotation=90)
plt.axvline(2001, color="r", linestyle="--")
plt.text(2001.2, height, "Economic Growth and Tax Relief Reconciliation Act of 2001", rotation=90)
plt.axvline(2003, color="r", linestyle="--")
plt.text(2003.2, height, "Jobs and Growth Tax Relief Reconciliation Act of 2003", rotation=90)
plt.axvline(2017, color="r", linestyle="--")
plt.text(2017.2, height, "Tax Cuts and Jobs Act of 2017", rotation=90)
plt.axvline(2021, color="r", linestyle="--")
plt.text(2021.2, height, "American Rescue Plan Act of 2021", rotation=90)
plt.axvline(2022, color="r", linestyle="--")
plt.text(2022.2, height, "Reversion to Previous Payment Levels", rotation=90)

# Set the y-axis to start at 0.
plt.ylim(0, 3500)
plt.show()