Why the new monthly child tax credit is more likely to be spent on children
One of the goals of tax credit coverage is to reduce child poverty, and direct monthly funds have the greatest impact on poorer households. The poorest third of young people were excluded from the first toddler tax credit because their father and mother did not pay income tax, and even many of those who did. acquired, an annual tax refund helping in an environmentally friendly manner with daily bills like meals, childcare and rentals.
Since the last major changes to household social coverage in the 1990s, and particularly throughout the pandemic, there has been a much greater awareness that household income is not secure over time. . People across income brackets come and go from monetary stability and employment.
“When we load so much of our aid into one big annual repayment, it means so many of our families are going into the red by the end of the year,” said Professor Shaefer. “We used to think of poverty in the United States as static – your income is below the poverty line – but people’s lives are very volatile.”
Politically, the more common a program, the more buy-in, because the money doesn’t benefit just a few people, and there is no stigma attached to it. Almost 9 out of 10 American households are eligible, but all of them are the richest.
In addition, the monthly computerized funds are a recurring reminder of the Presidency’s assistance. Both events have become more prepared to send unconditional checks throughout the pandemic and seek a credit score for it. President Trump made sure his name was on the stimulus checks, and President Biden sent letters to all households receiving the small profit.
It’s a sharp distinction with President Obama’s 2009 tax cut, whereby he cut taxes withheld from people’s paychecks so they make extra money – but they didn’t. not really understood nor gave it a political credit rating.
“I think Democrats learned their lesson under Obama,” said Samuel Hammond, director of poverty coverage and welfare at the Niskanen Center. “Quietly reducing people’s taxes can be based on theory, but don’t win you political favors. Democrats are keenly aware that the relevance of this policy will help remind voters that Democratic governments are helping ordinary people. “