Can the American Recovery Plan's Child Tax Credit be made permanent?

June 20, 2021 5:35 PM

Something really good is happening next month. A celebration of the expanded Child Tax Credit in the American Recovery Plan, and a plea to make it permanent. "Children cost money, but a market economy does not magically allocate extra money to the parents of children relative to non-parents. In fact, it is somewhat more challenging to earn money when you have a kid because they impose logistical barriers to working. As a result, unless the government provides parents with extra money, the living standards of families with young children will be systematically lower than those of the childless. That’s one important reason why the poverty rate for children is so much higher than the poverty rate for adults."

"... It also tackles a problem where, unlike road quality, the United States really is an extreme global outlier. And it’s designed to do all that in a way that also provides meaningful help to middle-class families. It’s a policy you can plausibly tout in Jared Golden’s Trumpy House district in rural Maine, but that also answers the question of what Raphael Warnock is doing to advance racial equity and how Jacky Rosen is delivering for the suburbs of Las Vegas. It helps a broad swathe of the population in a really concrete way, and opposition to it is driven by the mean-spirited and inaccurate view that the only way to keep people interested in earning money through work is to threaten to starve their children if they don’t.

"Beyond that, it is well-designed for the budget reconciliation process without any changes to the filibuster or breakage of norms, and it has a plausible bipartisan path to extension through the 'tax extenders' charade. But for all this to be possible, people need to talk about it and get excited about it. I don’t necessarily get the sense that the White House or congressional leadership sees this as a make-or-break issue for the legacy of the 117th Congress, but it genuinely is and deserves to be seen that way. Congress is doing something amazing and important by creating the checks that are going out next month, but to make it really count, they need to focus on entrenching this policy."

posted by russilwvong (16 comments total)

And naming kids in the title reminds people that, since we can't or won't provide meaningful child care to everyone, we have to cover it on the back end with a direct payment.
posted by wenestvedt at 7:50 PM on June 20, 2021 [6 favorites]

The benefits don't stop with the families receiving the Child Care Tax Credit. Thanks to the Multiplier Effect, that money ripples through the economy, increasing demand and real GDP at every turn.

The family may, for example, spend the Child Care Tax Credit on child care, medical or dental services, groceries, shoes and clothing, etc. The same dollars are spent again and again on labor that wouldn't have been hired otherwise, and goods and services that wouldn't have been bought otherwise. Every time the money changes hands, a little of it produces tax revenue for state, local, and federal governments. It can't ripple on forever, but the economic good the Child Care Tax Credit produces goes far beyond just the people who receive it initially.
posted by Daddy-O at 12:35 AM on June 21, 2021 [18 favorites]

This is actually so much more pro-life than being anti-abortion.

Helping parents with child care costs is going to go a long way in other aspects of society: less stressed parents, parents who then have means to spend on other goods and services, etc.
posted by ichomp at 1:41 AM on June 21, 2021 [30 favorites]

As a result, unless the government provides parents with extra money, the living standards of families with young children will be systematically lower than those of the childless. That’s one important reason why the poverty rate for children is so much higher than the poverty rate for adults.

And one important reason why birth rates are plunging, which if you're an anti-immigration republican maybe you should be trying to do something about ?
posted by saturday_morning at 5:40 AM on June 21, 2021 [5 favorites]

They are. Doing their best to prevent women's access to contraceptives *and* abortions. That should fix it, right?
posted by tigrrrlily at 7:40 AM on June 21, 2021 [2 favorites]

I love the idea of dems co-opting the year-end tax extender bill to use for something good like this. I mean it's a horrible way to run a social program but if we can't fix the broken politics at least we can make it work for us.
posted by 3j0hn at 8:26 AM on June 21, 2021 [4 favorites]

It's hard to come to the conclusion that they actually want anyone to be comfortable and prosperous in this country anymore.
posted by bleep at 8:35 AM on June 21, 2021 [2 favorites]

^ This comment is confusing because I'm living in the future where this good impulse is viciously cut/removed in about 6 months.
posted by bleep at 8:55 AM on June 21, 2021

It's hard to come to the conclusion...

They want serfs, not citizens. Literally 90% of the Conservative agenda, globally, can be easily understood through the lens of a return to feudalism. The remaining 10% can be understood by just remembering that some people really enjoy cruelty.
posted by aramaic at 9:44 AM on June 21, 2021 [11 favorites]

They want serfs, not citizens. Literally 90% of the Conservative agenda, globally, can be easily understood through the lens of a return to feudalism.

Hierarchies. Just one hit and you're hopelessly addicted.
posted by Your Childhood Pet Rock at 10:36 AM on June 21, 2021

Just Resistbotted my reps.
posted by joannemerriam at 11:32 AM on June 21, 2021 [1 favorite]

This is a nice step, but can we stop pretending that tax-sheltered savings for childcare, or even a $3600 tax credit, is going to be a magic cure-all in high cost-of-living areas? Daycare for an infant starts at about $1500/month around here, and the place that opened on the ground floor of my last office building charges $1100 PER WEEK until the kids hit 18 months.
posted by Mayor West at 12:19 PM on June 21, 2021 [7 favorites]

I am very glad that this expanded CTC got passed, and I'm hopeful that it will be a success and be made, if not permanent, then impossible to allow to expire, like the tax extenders. But I am concerned that the program design may prevent it from succeeding, either on its own terms or as a political project. The decision to have the IRS administer the credit, rather than a better suited agency like the Social Security Administration, is already hampering the rollout, as Michelle Singletary recently wrote about in the WaPo. (TLDR: poor families who don't file tax returns are being directed to this website, built by Intuit, to claim the credit -- a website that, among other things, is not mobile-friendly, is only in English, and is not set up to be easy to use.) That's on top of the inherent difficulty of making payments based on current-year income, which by definition can't be known in advance. It may yet work out politically, especially for middle-class families who will get the credit automatically, but as a poverty fighter, I'm still skeptical.

P.S.: If you or anyone you know needs to file a tax return to claim the CTC (or COVID relief checks, for that matter), direct them to Get Your Refund, built by Code for America; it's much better designed than that Intuit monstrosity.
posted by Cash4Lead at 12:25 PM on June 21, 2021 [8 favorites]

This sounds like a good start, but I would like to see much higher credits at low income levels, with the phaseout coming much sooner than $200k + family incomes.
posted by ktkt at 1:51 PM on June 21, 2021 [6 favorites]

Seems like we're about to find out if keeping children in poverty suits the needs of dark money donors.
posted by adept256 at 6:01 PM on June 21, 2021 [5 favorites]

This is the first acknowledgement of the expenses of raising children that doesn't start with "5 easy hacks..." or end with "will women ever really have it all?!?!"

So, I appreciate this plan in many ways.
posted by Toddles at 9:06 PM on June 21, 2021 [4 favorites]