STATEMENT: Child Tax Credits Are One of the Best Investments We Can Make as a Country
Washington, D.C. — Today, House Ways and Means Committee Chairman Richard Neal (D-MA) released the committee’s section of the fiscal year 2021 budget reconciliation bill, the legislation implementing President Joe Biden’s American Rescue Plan. The Ways and Means Committee draft would provide families with a child tax credit of $3,600 for children under age 6 and $3,000 for children ages 6 to 17. The bill calls for the tax credits be paid out in monthly installments beginning in July, with monthly payments of $300 for children under age 6 and $250 for older children up to age 17. Unlike the current child tax credit, which often leaves behind the families experiencing the worst poverty, the benefits under the new bill are fully refundable, meaning they would reach families earning no or little income. In a 2015 report, the Center for American Progress proposed making the child tax credit fully refundable, paid monthly, and inclusive of a young child component.
Following the release of the legislation, Alexandra Cawthorne Gaines, vice president of the Poverty to Prosperity Program at CAP, released the following statement:
There is no reason that the United States should have one of the highest child poverty rates of any wealthy country, and this pandemic is exposing the urgency of the problem. Child tax credits have the potential to change this, cutting child poverty in half and helping millions of families meet the ever-increasing costs of raising children. Unlike existing child tax credits, this proposal would reach families experiencing the worst poverty and also account for the extra costs, such as day care and diapers, associated with raising young children. Boosting the child tax credit in concert with existing social safety net programs such as the Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) is an effective way to help families recover from the COVID-19 crisis and build a more prosperous future.
Seth Hanlon, senior fellow at CAP, added:
Reducing child poverty is one of the best investments we can make as a country, and the child tax credit expansion in the House Ways and Means Committee bill is a historic leap forward. It will deliver urgently needed help to millions of families who are struggling even more this year, contributing to a faster, more inclusive recovery from the pandemic. It fixes one of the biggest flaws in our tax code and the 2017 tax law. It will also be an effective source of relief and stimulus as the nation recovers from the COVID-19 crisis. Beyond that, it will make a tremendously positive difference in children’s lives—enhancing their well-being, health, and long-term prospects.
For more information or to speak with an expert, contact Julia Cusick at firstname.lastname@example.org.