The child tax cut has been effective at cutting child poverty

Shortly after taking office, President Biden got to work selling Congress and the country on a massive coronavirus relief package. The Child Tax Credit (CTC), which was to be worth $1.9 trillion, was raised from $2,000 to $3,000 per kid (or $3600 for children under 6 years) and made refundable.

For parents earning $400,000 and less, the program provides direct payments in the range of $250-300 per month for those who file jointly ($200,000 on a single tax return).

While speaking about the CTC, the president made bold statements that seemed a bit far-fetched at the moment. “If we get this done, it will cut child poverty in half,” Biden said at a roundtable in February. With Jen Psaki, White House Press Secretary, reiterating the claim in three different beings, the White House stood behind this statement.

America’s poverty rate is one in seven.

The bill was passed and signed into law by the president in March and we’re now beginning to see the benefits of the CTC played out in real-time.

A study by the Poverty Center at Columbia University found that after parents began receiving direct deposits in their bank accounts it had an immediate effect on child poverty rates.

“Using our innovative approach to tracking monthly poverty rates, we project that ongoing COVID relief efforts continue to have a sizable effect on reducing child poverty keeping 6 million children from poverty in July 2021 alone (a reduction of more than 40 per cent),” According to the Poverty Center, the study found that direct deposits from parents’ bank accounts had an immediate effect on child poverty rates.

Researchers believe that as the rollout continues, “the expanded Child Tax Credit has the potential to achieve even greater child poverty reduction.” If all eligible children are enrolled in the program, the CC has the “potential to reduce monthly child poverty by up to 40 per cent on its own.”

When combined with other COVID-19 relief measures, the CTC could contribute to a 52% reduction in child poverty.

A survey from the Census Bureau found that most families are spending money on clothing, food, housing, and utilities.

It is essential to ensure that all children who are eligible for the CTC program are enrolled. This will allow you to maximize the benefits of the CTC. An estimated 67 million children are thought to be eligible for the program although the Treasury Department estimated that it made payments for 61 million children.

The CTC’s dramatic success has the president and Democrats in Congress pushing to expand the program until 2025. Earlier this month, House Democrats proposed an extension of the increase in the tax credit as well as making the funding permanent. The proposal was cheered by pro-family advocates such as MomsRising.

“The child tax credit expansion has made historic gains for our families and our economy in 2021, lifting 50% of all children out of poverty and boosting the economy,” executive director Kristin Rowe-Finkbeiner said according to CNBC.

Last week, 450 economists signed an open petition calling for the extension of the CTC. “It’s very rare to find an issue where so many economists agree on everything,” Jacob Goldin, an assistant professor at Stanford Law School, told CNBC. “But there’s just very, very strong evidence that providing extra financial assistance to kids growing up in low-income households yields big benefits in their lives.”

When a child is lifted out of poverty it has a lasting impact on their life. Columbia’s Poverty Center says that it leads to a decrease in infant mortality, improves the health and life expectancy of poor children, and increases future productivity. The Poverty Center estimates that the CTC’s societal benefits outweigh its costs by 8 to 1.

The fact that child poverty persists in the wealthiest nation of the world is one of the biggest disgraces in American life. The CTC has shown that there is an easy, and effective way to combat this serious issue by simply giving people a break on their taxes. Let’s hope that our leaders realize the impact the CTC is having on the lives of children and will make it a permanent part of the effort to eradicate child poverty in America once and for all.