There are limits to this sort of tax relief because taxable payroll is not progressively distributed. Increase the Child Tax Credit and make it fully refundable. The Center on Budget and Policy Priorities says 24 million children do not benefit from this provision of the Bush package. The reason is that 12 million working families with children do not owe enough income tax to take advantage of the child credit. But most of them do pay payroll taxes.
Some advocates propose a pure refundable credit.
A family with no income could file an income-tax form and get a check from the government. This is tantamount to cash welfare, however, and is thus politically improbable. More likely, a refundable Child Tax Credit could be phased in according to some definition of qualifying income. This option simply expands an existing feature of the tax system. Also, it provides equal relief per child regardless of income level once the credit is fully phased in.