Joe Biden has offered an array of anti-poverty measures in his bid to win the presidency. One of those proposals, an expansion to the child tax credit, has broad and even bipartisan support and was part of the recipe laid out in a study of how to cut child poverty in the U.S. in half by the National Academies of Sciences, Engineering and Medicine.
Biden’s proposal mirrors a proposal included in the HEROES Act, the coronavirus relief package passed by the Democratic-led House back in May.
Most families already receive the credit, but Biden wants to expand the amount each family gets from $2,000 per child to $3,000 for each kid 6 years and older and to $3,600 for kids 5 and younger. Currently, the upper threshold for the credit begins to phase out at about $200,000 for a single parent or a $400,000 for a married couple. That would remain in place under the proposed plan.
Kris Cox is a senior tax analyst from the Center for Budget and Policy Priorities, who has studied the proposal. In a conversation, edited here for length and clarity, Cox said the Biden-Harris proposal would eliminate the bottom threshold for receiving the credit, which would put cash into the hands of millions of the lowest-income parents in the country, who are currently excluded from the credit.
Kris Cox, Center for Budget and Policy Priorities: For people who have very low earnings, they only receive a partial credit, or, in many cases, no credit at all. So 27 million children, their families do not receive the child tax credit because their earnings are below the $2,500 threshold to get the credit, or they receive a partial credit because the credit increases with earnings.
Connelly: We just saw the child tax credit expanded recently in 2017. President Donald Trump included an expansion of the child tax credit in the Tax Cuts and Jobs Act, which doubled it from $1,000 to $2,000. Do we know what effect that doubling had on poverty in the US?
Cox: The 2017 change expanded vastly the people who are eligible [who are] much higher up the income scale. Prior to the 2017 law, the credit phased out [for people with] incomes were over about $150,000. The 2017 law pushed that to $450,000, so people who make between $150,000 and $450,000 -- very upper-middle-class people who have quite a few resources to raise their children -- were newly eligible for the child tax credit.
The changes in 2017 were actually targeted at people with higher incomes, and left behind 27 million children whose families receive no credit or a very small partial credit because their families do not make enough money.
Connelly: The Biden proposal would expand to cover those 27 million very poor families. It would also expand the amount of money going out, raising it up to $3,000 per kid aged 6 and older and $3,600 a year for each kid aged 5 and younger. What would that mean for American families?
Cox: We're seeing in this particular moment how extreme some of the hardship is that people are facing. Nearly 78 million adults are having trouble paying for regular daily and weekly expenses. And between 7 and 11 million children are struggling to eat enough during this recession. So expanding the child tax credit to reach those children whose families make too little to receive the full child tax credit would really help in a moment when families are struggling to meet basic needs.
As we move out of the recession, which we expect to continue for quite some time — we're not seeing evidence of a strong economic recovery just yet — the child tax credit would be an important boost for those families to have a little bit more security as they're raising their children.
Connelly: There is a growing focus on child poverty in the U.S. What do we know about the long-term benefits of addressing child poverty?
Cox: Research shows that income support to families with young children can have very long-term impacts on their health, their education, and the types of jobs they get, and thus the type of income they have later in life. So income support has been shown to be extremely important, especially when poverty is prolonged, when children experience poverty for long periods of time. Very young children experiencing poverty also has a detrimental effect on long-term health, education, and job and income prospects.
Got a tip? Christopher Connelly is KERA's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher at cconnelly@kera.org.You can follow Christopher on Twitter @hithisischris.
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