When Republicans passed their sweeping tax bill in 2017, they tried to sell the public on the more unpopular provisions like huge corporate cuts and the restriction of state and local deductions with the more benign-sounding provisions, like the doubling of the child tax credit.
Unfortunately, according to The New York Times, even that provision was mainly a giveaway to wealthy families that did little for those of modest means.
"With two children and a third on the way, Ciera Dismuke worked five jobs last year while earning just under $15,000," wrote Jason DeParle for the Times. Although the Trump administration often boasts that it doubled the federal child tax credit to $2,000 per child, Ms. Dismuke, like millions of Americans, earned too little to fully qualify. Instead, she got $934 a child, an increase of just $75. Letha Bradford, a teacher’s aide, qualified for an equally small increase, despite a household budget so tight that she listens to her son’s high school football games outside the stadium to save the admissions fee. Michael Spielberg, a Sam’s Club attendant, also received only a partial credit, while his son, Josh, who has Asperger’s syndrome, doubled up on classes, hoping to graduate early and turn his job bagging groceries into full-time work."
The fundamental problem is that the child tax credit is not a guaranteed block of money; it's calculated by the taxpayer's income. This means that a household needs to make more than $30,000 to receive the full benefit per child — any less than that, and the credit is smaller, which is counterintuitive since these are the families that need it most.
In Louisiana's 5th Congressional District, for example, "54 percent of children are too poor to receive the full $2,000. Among those with a partial benefit, the average is $1,008," wrote DeParle. "Many low-income families do not realize they receive the complicated benefit, which is often confused with the earned-income tax credit. Until she showed a reporter her tax return, Ms. Dismuke did not know she had gotten $934 per child. Told that affluent families get much more, she said, 'That is not right — I’m quite sure they don’t need it.'"
Republicans have contended that the child tax credit is not meant to be a welfare program, but a tax cut — so naturally those who pay more taxes would get more back. But this stands in contrast to other developed nations like Britain, Australia, and Canada, where the tax code gives the lowest-income families a guaranteed allowance per child to get by — and Democrats, as well as some Republicans like Sen. Mitt Romney (R-UT), are now pushing to remove the income test altogether to create such a system here.
Raising the incomes of poor families, say experts, would have a profound impact on child outcomes, improving their academic achievement and decreasing the risk of drug use.
You can read more here.
