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Who is most likely to be poor in America? Children. Their pre-pandemic poverty rate of 1 in 7 exceeds that of most developed nations.
During the 2022 tax season that ended last month, many low-income families rejoiced over their refunds, but the celebration was bittersweet. A key tax break to address child poverty had ended.
Just a year ago, Congress expanded the Child Tax Credit (CTC) through the American Rescue Plan to finally directly address our country’s longstanding child poverty. Not only did they increase the amount families would get by 50% to $3,000 per child ($3,600 for a child under 6), but they gave families an advance on the credit through monthly payments and allowed families with no earnings to receive the credit as well. Families received monthly payments of $250 to $300 from July to December and the rest of their CTC after filing their tax return.
The expanded CTC was set to expire in 2021, but President Biden proposed extending it as part of Build Back Better, along with other historic investments in working people and climate resilience. Unfortunately, all 50 Senate Republicans, joined by Democratic Sen. Joe Manchin of West Virginia, blocked its passage early this year. That stopped the CTC’s dramatic progress toward cutting U.S. child poverty in half.
There is no shortage of data on how the expanded CTC helped low-income families and their communities. As a provider of free tax filing assistance to such households, Just Harvest saw firsthand the huge difference it made to our clients. Of the more than 2,500 returns we prepared this year, 610 CTC claims returned more than $1.9 million to our clients, accounting for 30% of all refund dollars (about $6.5 million) — a portion that grew by 36% since last year.
But more impressive is what these extra dollars, and the monthly payments prior, meant in the lives of our clients.
Alexis, a single mother of three from Brookline, said the monthly payments helped her get ahead with the bills. That extra breathing room allowed her to buy basic necessities like Pull-Ups, clothes and shoes for her growing kids.
It allowed other single moms she knew to finally be able to afford day care so they could work. When the payments stopped, so did that progress.
Erin is a South Hills single mother of twin boys, one with disabilities, who struggles with her own disabilities as well and can only work a couple of days a week. Her CTC went primarily to her kids, who needed new shoes and necessities. “Just to be able to get them the things they need is huge for me,” she told us. “Our neighborhood always tries to help, but I want to be able to do things on my own and I finally feel like it is possible.”
That kind of empowerment can be life changing, and for many women trapped in abusive situations, even lifesaving.
Nicole, a single mother from Dormont, credits the CTC with enabling her to leave an unhealthy relationship and purchase the things her son needed. “Being able to buy sneakers and clothes and make his Christmas and birthday happen made me feel like I was doing the right thing, and that as difficult as it was to leave, I could take care of my son on my own. I would be lost if I didn’t have that money to help me.”
These mothers’ experiences accord with those of other folks who told us how the CTC affected them.
The elected officials who have opposed this expanded tax credit for low-income families cynically suggest without evidence that it will just serve as another proverbial “welfare hammock,” helping its recipients shirk employment. Setting aside the impossibility of this — no one can raise a child on just a few hundred dollars a month or few thousand a year — research from Humanity Forward found quite the opposite to be true. The CTC, by helping recipients afford child care, gas, car repairs, public transportation, and other necessary expenses they need to work, improved their ability to work.
Almost all (94%) of CTC recipients said they would continue to work just as much, or even more, as a ripple effect of the payments. The CTC is what allows struggling families to pull themselves up — not by their own bootstraps, an impossible maneuver, but with the support of our whole community. The recipients’ earnings, spending and taxes then refill the pot. Everybody wins, especially America’s children.
Americans value liberty and justice. But there is neither in poverty. Our nation’s economy and laws have for centuries helped the rich get richer while everyday people work themselves to the bones for inadequate wages. This has had a disproportionate effect on women and people of color, who were for centuries blocked from the legal rights, property ownership, jobs, schools, resources, and opportunities that would have allowed real upward mobility. That stratification of our society has hurt everyone but those at the very top. It has perhaps hurt kids in poverty most of all, and robbed all of us of their potential.
We’re happy to hear that Congress is now reconsidering a federal spending package that would provide much needed support for families working to make ends meet.
We need to make sure that this bill includes the expanded Child Tax Credit to help ensure that everyone can thrive with dignity. Research by Columbia University’s Center on Law and Social Poverty determined that each dollar invested in the CTC yields $8 in economy-wide return on investment.
Urge your members of Congress to restore the expanded CTC to free struggling families from distress. Tell them it’s time to build back for justice.
