Diploma thesis is concerned about personal income tax allowance, especially focused on child tax credit. Purpose if this diploma thesis is to analyze legislation of tax allowances in the Czech Republic and analyze the possible impacts of increasing tax allowance in the Czech Republic as well. First part of this thesis is concerned about tax legislation with regards to child tax credit within OECD countries. Second part of this thesis is concerned about tax allowance legislation in the Czech Republic and its changes for the year 2015. Third part of this thesis is focused on practical calculation in case of increasing child tax credit for the year 2015 and in case of intended increase of child tax credit for year 2016 within employees of a small company.

The American Rescue Plan, signed into law on March 11, 2021, contained $1.9 trillion of relief for taxpayers (Segers, 2021). The new law, with several retroactive 2020 tax return items, passed in the middle of filing season. Tax preparers scrambled to quickly understand how to process the remaining tax returns and how to handle the millions of already filed tax returns. Tax professionals and individuals seem to now have a handle on the changes that were retroactive, but the 2021 expanded Child Tax Credit and its advance payments are still causing much confusion among individual taxpayers. Tax preparers need to be able to explain this credit to their clients.

The child tax credit (CTC) is the largest anti-child poverty policy in the United States, but it gives more benefits to upper-income households than it does to lower-income households. Meanwhile, traditional cash benefit welfare programs like Temporary Assistance to Needy Families (TANF) have shrunk over the past two decades. Why have American policymakers approached child poverty with indirect rather than direct spending solutions? This thesis argues that neoliberalism, defined as the reliance of policymakers on market means to achieve public goals, is to blame. Historical case comparisons between TANF and the CTC demonstrate that policymakers utilize neoliberal code words implicitly to divide target populations into deserving and undeserving groups. Additionally, an original survey experiment finds that political actors can increase public support for regressive economic agendas by incorporating indirect social spending into their legislation. Ultimately, neoliberal values challenge our conception of what constitutes good politics and good policy. It is clear that direct spending solutions to child poverty are present and available, but their attainability is falsely shrouded in clouds of skepticism from the neoliberal mindset.