New research shows that if the expanded child tax credit were made permanent, the social and economic benefits of the investment would far outweigh the costs of the program.
A disorganized from Columbia University, Barnard College, and researchers from the Open Sky Policy Institute find that if Low-income families with a child who sees their income increase by $1,000 a year, the benefits would outweigh the cost of the program 10 times.
While making the program permanent would cost the government $97 billion, it would create social benefits worth $982 billion. These benefits include direct impacts, such as improved health and longevity of children and parents and increased future earnings for children, and indirect benefits, such as lower crime rates. Taxpayers would also benefit, saving $135 billion in total, according to the research.
Working papers are often not yet peer reviewed or edited for publication in a journal. If the paper’s findings are true, it bolsters the arguments of tax credit expansion proponents that the benefits of the program literally outweigh the costs.
Further research found that the expanded child tax credit of the COVID stimulus bills, which gave families $300 per month for children under 6 and $250 per month for children 6 to 17, had a huge impact on the economy. Published data last month found that after the tax credit expired in January, child poverty increased by 41%, pushing 3.7 million children into poverty.
The credit came with a number of other benefits; food insufficiency rates have decreasedconsumer spending increased and credit helped people keep their jobprobably helping to pay high childcare costs.
Other surveys have also shown that the tax credit is transformative for families. The Census Bureau found that 91% of low-income families spent the credit on necessities, while 92% of families said the payments had helped improve their financial stability, according to a survey by SaverLife.
Democrats in Congress had sought to extend the child tax credit for 10 years or make it permanent. Corn Conservative Sen. Joe Manchin (D-West Virginia) was fiercely opposed to the program, even though it helped keep children out of poverty. Democrats have sworn to continue working to get the proposal passed — but despite their attempts to pressure Manchin on the issue, the senator was not interested in discussing it.
Some conservatives have tried to revive the proposal by linking work requirements, but defenders say that adding barriers would only make the program more cumbersome and make it harder for the money to reach the families who need it most.
The expansion of the Child Tax Credit has lifted millions of children out of poverty.
In the annals of American history, we have never had a government program that has so clearly and directly helped so many people in such direct need.
Poverty is a political choice. It’s not too late to renew the extension.
—Robert Reich (@RBReich) March 22, 2022
Progressive lawmakers expressed frustration Last year as Manchin demanded they choose between the tax credit, paid family leave, or child care funding proposals that were in some versions of the Build Back Better Act.
Some progressive lawmakers have called for reviving the expansion. “Another month without the expanded Child Tax Credit and working people continue to pay the price,” Congressional Progressive Caucus Chair Pramila Jayapal (D-Washington) wrote. Wednesday. “We have to solve this problem. Renew it now.