The child tax cut is a regressive measure, which means it will affect people with higher incomes more than those with lower ones. This is due to the progressive nature of the regressive tax system. Those on higher incomes would be expected to contribute more towards the support of their dependents, whereas for those on lower incomes, the amounts they can provide will be cut.
There are two different ways in which you can avail of the Child Tax Cut. You can ask the authorities to waive some of the income tax you pay or you can reduce the tax amount by making some adjustments in your personal allowance or deductions. These adjustments in personal allowance and deductions are considered valid only for the current year and can be claimed for the following year as well. For example, if you have been paying five thousand dollars in tax every year, but this year you have been able to pay only three thousand dollars in tax, then you will be eligible to claim fifty percent reduction in your tax this year. The money that you save can be used to reduce the expenses and save for your children’s education or to buy a house for your children.
The Child Tax Cut is a regressive tax cut. It benefits people who are on higher incomes. Those on lower incomes will find that their expenses have been increased because of the cut. If you are one of those people who find yourself in this situation, then don’t despair. There is hope and there is help available.