While many Americans may be focused on the $1,400 stimulus checks wending their way toward them, those who will be most impacted in a positive way by the American Rescue Act are actually American families, who will finally have a greater guarantee that they can feed, clothe and shelter their children – at least in the coming year.
The new and improved Child Tax Credit included in the stimulus package will increase tax credits already offered to American families and provide some of those funds up front, when they’re most needed.
Single parents with incomes of up to $75,500 and married couples with incomes of up to $150,000 will receive a $3,600 tax credit per child for children under six years old and a $3,000 tax credit for children six to 18 years old. (Tax credits then decrease as family income increases, capped at $100,000 for single parents and $200,000 for married couples).
Beginning as early as this summer, families would receive about half the tax credits as periodic cash payments to them; they would claim the rest as a credit on their tax returns (or be refunded the money, as appropriate).
In Colorado, the Child Tax Credit will impact 89% of children, some 1.1 million kids. The credit will add enough income to boost 57,000 Colorado children’s families out of what the federal government defines as poverty – which is a laughably low amount. (How laughable? A family of four is considered impoverished by the federal government only if family income is less than $26,500.)
Overall, the Child Tax Credit is expected to cut child poverty nationwide in half, including reducing poverty for Hispanic children by more than 45%, for Black children by 52% and for Native American children by 61%. The credit will have a significant impact on thousands of families of all races and ethnicities in the Four Corners area.
Sen. Michael Bennet, Democrat of Colorado, first introduced legislation in support of child tax credits in 2015, and ever since has worked toward its passage. Sherrod Brown, D-Ohio, has been his co-sponsor, and in late 2018 they garnered 11 other Senate cosponsors, including Democrats Sen. Cory Booker of New Jersey and then-Sen. Kamala Harris of California. On the House side, Democrats Rep. Rosa DeLauro of Connecticut and Rep. Suzan DelBene of Washington sponsored the bills.
Bennet, Brown and Booker successfully promoted the inclusion of the Child Tax Credit in the American Rescue Plan to President Biden.
Yes, the Child Tax Credit is expensive, estimated to cost about $100 billion in the coming year. (By comparison, the U.S. Defense Department budget is about $700 billion a year.) And it’s not perfect: it effectively discriminates against single parents by providing them with less money, though a child’s needs are the same whether one or two parents are involved. (Existing tax codes are blamed for this discrepancy.)
Nevertheless, the Child Tax Credit is an idea whose time has come. Many of the wealthiest countries in the world already provide this kind of ongoing guaranteed income for children to ensure that they have a decent chance of growing up healthy and able to become contributing members of society.
Studies have shown over and over that children who grow up in poverty are plagued for the rest of their lives by its impacts and arguably are more likely to need societal support. Arguments against this kind of income support have been disproven over and over in nonparitsan government and academic studies.
But one year will not be enough. Every child deserves a chance at a decent life, regardless of circumstances of their families, and it benefits all of us to diminish child poverty.
We salute Sen. Bennet and his cosponsors for their unremitting dedication to getting the Child Tax Credit this far. We trust that he will champion it as a permanent guarantee for our children’s – and our country’s – future.