Until 2020, the maximum amount a family could claim as a child tax credit was $2,000 per child, ending in the income year before that child reached 17 years old. But the American Rescue Plan, passed in March 2021 as another response to Covid-19, contained a provision referred to as the Child Tax Credit of 2021. This increased the per-child credit to $3,600 for kids younger than 6 and $3,000 for those 6 to 17 and authorized monthly payments as a sort of “draw” on the annual credit.
Notice how I sneaked in the reference to Covid? So did legislators. It wasn’t lost on any of them, including Republicans, that once this increased “credit” was introduced—no matter the rationale—it had a good chance of becoming part of the economic furniture.
The ARP, as described on the White House website, was “President Biden’s plan to provide direct relief to Americans, contain COVID-19, and rescue the economy.” Presumably, then, the intent was to mitigate the effects of the virus—and the policy response of lockdowns—both on the economy and on individuals and families.
There is no doubt these monthly payments helped millions of families who suffered hardships as a result of workplace shutdowns, school closures, lack of childcare, and illness. In this sense, the president’s plan did provide “direct relief.” Whether or not it “contained Covid-19” or rescued the economy are debates for another time.
But one year later the question has become whether the tax credit increase is still warranted. To the left, there is no question. It would be cruel to strip families of this benefit and plunge millions of kids into poverty.
Gone is any mention of the “rescue” aspect of the plan. It’s understood, although rarely uttered out loud, that this was simply the camel’s nose under the tent, and the real intent was to broaden the redistribution of income already represented by traditional child credits.
The current push is to extend the increases, if not indefinitely, at least for another year. In other words, we may not need to rescue families from Covid effects any longer, but let’s give them another year to rely on the payments. Surely, without them these desperate kids will be thrown back into the poverty that they may (or may not) have been experiencing in 2020.
The latest proposals would offer a married couple a tax credit of $350 a month starting with a positive pregnancy test. Need to plan for that new car seat and diaper bag? Don’t wait until the sleepless nights start. Get a check from the government and shop now!
A recent Politico article reports leftist lawmakers are warning the president he will “see the wrath” of voters if he agrees to abandon “an expanded tax credit that dramatically reduced child poverty.” Never mind that the credit was not supposed to have the lasting effect of reducing child poverty. If the left wing of the Democratic Party can cement the narrative that eliminating the Covid-era benefit will hurt “working families” and innocent children, this is likely to become received truth.
But what of the idea that these payments are not giveaways but credits, a reduction of the taxes that parents would otherwise pay? After all, Republicans have been the perennial champions of “letting people keep more of what they earn,” and a tax credit does precisely that.
Having raised nine children to adulthood, I am no stranger to stretching a dollar, and I certainly wouldn’t have turned down the chance to keep more of my family’s income in the monthly challenge to keep everyone in shoes. In a broad sense, I am all for lower taxes and for allowing Americans to make more of their own decisions on how to spend their hard-earned dollars.
But in the case of specific credits to young parents, we are asking retirees, childless couples, and single earners to bear an even greater share of the national burden, when they have been hurt by the lockdowns as well. To some extent, we have always done this by extending tax credits to parents. But doing it in this dishonest way—asking ballooning entitlements to masquerade as Covid relief—is beneath us.
CNN declared last week, “Prices just keep rising. It’s time to revive the enhanced child tax credit.” Clearly, this is no longer about rescuing the country from the Covid economy. It’s now meant to be a rescue from the Biden economy.