Children at the Heart: Why Kids Deserve an Improved Child Tax Credit
Amidst a backdrop of rising challenges facing children and families, the call to expand the Child Tax Credit reflects a national consensus on the need to prioritize our children's future. Consequently, the Child Tax Credit is wildly popular with the American people overall and a top priority with parents. In a February 2024 National Parents Union poll, the #1 issue that parents want the federal government to act on would be to “expand the Child Tax Credit” (87-9%). In a country as politically divided as ours, this is about as close to consensus as it gets.
Parents understand better than anyone that children are in crisis, with infant and child mortality rates are rising, child poverty more than doubling after the expiration of the improved Child Tax Credit in 2021, many kids facing unprecedented mental health challenges, and kids witnessing a rise in preventable diseases due to anti-vax misinformation and parental uncertainty about immunizations.
While parents are looking for support (or at the very least, not harm), too many politicians are pushing an agenda that isolates parents with a “go at it alone” or “organized abandonment” agenda that attacks institutions and people, including pediatricians, early childhood professionals, librarians, public schools, and teachers, whom most parents see as allies and partners rather than adversaries in the job of raising children.
Most parents do not think they have all the answers and welcome the help, advice, and expertise of their kids’ pediatricians, early childhood professionals, librarians, and teachers. As a parent of four, I talk all the time to other parents about how we, as parents, often feel a bit lost because just when you figure out how to deal with a certain stage of your child’s life, such as “the terrible twos”, kids change and suddenly you have a different set of issues to figure out, such as puberty, youth sports, music, summer camps, adolescence, dating, and driving a car.
There is no definitive parenting handbook, and so the advice, counsel, and expertise of others is welcome and of immense value. Unfortunately, groups like Moms for Liberty, who stir up division and chaos for political gain, and thereby are attacking and demeaning the very people who have dedicated their careers to improving the lives and well-being of children.
As Army veteran Charles Gragg, Jr. writes in a guest column for the Kansas City Star:
Teachers aren’t grooming your kids. They aren’t indoctrinating your kids. They are teaching your kids. They aren’t doing it for the money or the fame, and they certainly aren’t doing it for the respect and accolades.
He adds:
Teachers teach because they care about your kids, just like you do. They want them to be the best version of themselves possible. They are proud of them; they care about them; they encourage them; they worry about them and they miss them when they’re gone. The kids know this, too.
Gragg, Jr. wrote this column in opposition to his own brother’s bill (Rep. Jamie Gragg has introduced HB 2885 to criminalize teachers as registered sex offenders for using a student’s preferred pronouns).
Most parents do not want to treat teachers as adversaries. What parents want, as the National Parents Union poll shows, is for politicians to fully fund public schools and to provide support and services to improve the lives and well-being of children rather than promoting fear, hate, and division. As Gregg, Jr. says:
I saw this [bill] as blatant hatred wrapped up in the guise of protecting children. This bill actually removes valuable support that is important for the children and needlessly targets teachers.
Fortunately, there are supportive members of Congress (see, for example, the Champions and Defenders in the Focus Campaign for Children Legislative Scorecard), who understand the challenges of raising children and the importance of teachers. They are prioritizing and taking action to, at the very least, help families with children by making things just a bit easier for them. They are choosing to help children and families rather than harm them.
These Champions and Defenders of Children are taking a leadership role in support of a child and family policy agenda, which includes measures such as supporting the Child Tax Credit, child health coverage, teachers and public education, early childhood education, child care, and paid family leave. They also work to prevent and reduce hunger, child and family homelessness, and child abuse and neglect. That is what families want – not division and discord.
To see if your Member of Congress or Senators are a Champions or Defenders of Children in the First Focus Campaign for Children Legislative Scorecard, you can check on their status HERE.
🎧 Listen to Rep. Suzanne Bonamici (D-OR) talk about her work as a Champion for Children in the Speaking of Kids podcast Episode #10 on your favorite podcast platform or at THIS LINK.
H.R. 7024, the Tax Relief for American Families and Workers Act of 2024
To use the Child Tax Credit as an example, Sen. Ron Wyden (D-OR) and Rep. Jason Smith (R-MO) worked together to craft bipartisan legislation, the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024). As we have pointed out in our Issue Brief, my most recent Substack newsletter, and our organization’s letter to the Senate on the bill, this bill is far from perfect, but it does at least mitigate some important problems that children and parents have with the Child Tax Credit in its current form.
Specifically, the bill would:
Increase the maximum amount of the refundable credit for low-income families to $1,800 in 2023, $1,900 in 2024, and to the full amount for all qualifying children in 2025;
Multiply the allowable refundable credit, which is calculated as 15% of earned income above $2,500 (and up to the cap), by the number of qualifying children (e.g., the calculation would be 30% for two children and 45% for three children);
Allow families to use earned income from a prior year in the calculation of the Child Tax Credit to help families who have a drop in income in a particular year (e.g., birth of a child, loss of a job, health care crisis, serving as a caregiver, recovering from a natural disaster, etc.); and,
Index the credit to inflation beginning in 2024.
In 1991, the bipartisan National Commission on Children recommended the creation of the Child Tax Credit in the U.S. and recommended that it be made fully refundable. If it had been established as recommended, all children would receive the same amount from the credit. Unfortunately, when it was established in 1997, it was not made fully refundable, and the value of the credit was tied to wages. Consequently, middle- and upper-income children get the full credit while millions of the neediest children receive no or only partial credit because their parents make “too little.”
Fortunately, expansions of the Child Tax Credit during the Bush, Trump, and Obama Administrations made the credit partially refundable. In 2021, the credit was temporarily made fully refundable as part of the American Rescue Plan Act (ARPA), but sadly, the Senate let that bill expire. As a result, an estimated 18 million children of the poorest children are, once again, “left behind” and do not receive the full credit of $2,000.
Helping and Not Harming Babies
Whether intentional or not, the Child Tax Credit can impose a “triple-whammy” on a family having a baby because:
The income of women often drops – sometimes dramatically – during the period of pregnancy, birth, and through the postpartum period;
Household and health care expenses rise with the birth of a child; and,
The Child Tax Credit, because it is tied to wages, is reduced at the very time that parents are most in need.
For the nearly 4 million babies born in this country annually, we must recognize that child poverty is, in large part, a public policy failure. Whereas public policy often tries to “fix” adults with punitive policies, it is the children who suffer.
Source: Robert Orr, “Why Child Tax Credit expansions should prioritize younger children,” Niskanen Center.
As Phillip Cohen wrote in the Washington Post eight years ago:
We know growing up poor is bad for kids. But instead of focusing on the money, U.S. anti-poverty policy often focuses on the perceived moral shortcomings of the poor themselves. We don’t try to address poverty directly, or alleviate it….
The Child Tax Credit should never punish those in need. As Sen. James Lankford (R-OK) recently said:
Federal benefits available to moms should be available to all moms.
Sen. Lankford added that we should “ensure the federal government treats all moms the same, no matter how small or young her baby is.”
Unfortunately, the Child Tax Credit does not do that and neither would the legislation Sen. Lankford was talking about (which would seek to add pregnant women to the Child Tax Credit but without fixing the “baby and child penalties”). In contrast, H.R. 7024 does attempt to at least mitigate the disparity and denial of the Child Tax Credit to babies, and it should be passed by the U.S. Senate at the earliest possible opportunity.
As noted above, the current Child Tax Credit imposes “baby and child penalties” that, in the case of a birth, cause a reduction or outright denial of the Child Tax Credit to a baby and his or her family due to a drop of income associated with the birth of a child.
H.R. 7024 mitigates this problem in two ways by including: (1) a “lookback” provision that uses income from a previous year that is likely higher than in a birth year to calculate the Child Tax Credit; and, (2) a multiplier based on the number of children in a low-income family to calculate the Child Tax Credit.
As I highlighted in my last newsletter, under current law, a wealthy mother of three kids with $150,000 of income would qualify for the full $2,000 credit per child, or $6,000. In contrast, a single mother with three kids with $10,000 of income would only qualify for $1,125. Thus, a mother with 15 times the income receives 3.6 times the Child Tax Credit assistance that a poorer mother with greater needs receives. This makes no sense, and again, helps explain why child poverty is so high among babies.
H.R. 7024 would mitigate this disparity by providing $1,125 per child, or $3,375 in total. Although there is still a disparity that should be ultimately eliminated (as legislation by Champions for Children, Rep. DeLauro and Sen. Sherrod Brown (D-OH), would achieve), H.R. 7024 would reduce the disparity for babies by, as Rep. Smith said, eliminating “child penalties.”
H.R. 7024 passed the House of Representatives by a vote of 357-70, but some Senate Republican lawmakers have expressed a desire to reimpose the “baby and child penalties.”
For example, if you eliminate the “lookback” (as opponents of H.R. 7024 are advocating), the Child Tax Credit would once again severely punish children in households who lost income due to the circumstances of having a baby. Some of these lawmakers are also in support of the Supreme Court’s Dobbs decision that limits the reproductive freedoms of women related to abortion. So if women, including teenagers, are required to bear a child, even in the cases of rape and incest, what is the policy rationale for punishing these women and their children with a reduced or eliminated Child Tax Credit for having a baby?
Maybe these lawmakers are simply “pro-birth” but anti-child? Or maybe they believe middle-class or wealthy babies should be valued more than babies born to low-income mothers, teenagers, or mothers who experience complications during pregnancy and childbirth?
Even “pro-life” organizations, which typically do little or nothing to support children after birth, do not think families should be punished for having a baby, and therefore, have expressed support for H.R. 7024. Thus, I would hope Sen. Lankford would support it as well.
Helping and Not Harming Children and Families in Natural Disasters
However, regardless of one’s position on abortion, it simply makes no sense to punish children with an elimination of the Child Tax Credit because they are victims of circumstances beyond their control, such as a natural disaster.
As an example, recent wildfires in the Texas panhandle, where my parents were born and raised, raged and burned to the ground many homes, farms, and ranches. To save lives, people all across the region had to be evacuated and now those families are trying to rebuild and figure out a way to cope with having lost everything – their homes, their ranches, their farms, their livestock, their crops, their personal belongings, and their livelihood.
One such family is the Grishams, who were forced to flee the wildfires and their family ranch between Fritch and Borger, Texas. They escaped with their five children and pets, but everything else was burnt to the ground and all that is left is “just ash and hollowed, burnt remains.” According to news reports, they hope to rebuild and are currently relying on the support of people in the Panhandle and across the country through a GoFundMe account.
Public policy also comes into play here, as the current Child Tax Credit has the “unintended” consequence of potentially slashing the Child Tax Credit that the Grishams currently receive for their five children to as little as nothing because they are facing much-reduced earnings in 2024 due to the fire. That is unacceptable and harmful to children and families.
Fortunately, H.R. 7024 seeks to reduce the “baby and child penalties” in the Child Tax Credit. For example, the “lookback” provision in the House-passed H.R. 7024 would allow the Grishams to use their 2023 income rather than 2024 to calculate the Child Tax Credit for their five children when they file taxes next year. This would ensure the Grisham children receive the full Child Tax Credit rather than subject them to “penalties” or only partial credits because of the unfortunate circumstances their family and families all across the Texas panhandle are facing due to the wildfires.
Sadly, certain Senate lawmakers, such as Sens. Thom Tillis (R-NC) and Marco Rubio (R-FL), who represent states frequently slammed by hurricanes, are holding up H.R. 7024 and demanding the reimposition of the “baby and child penalties” in the Child Tax Credit to families like the Grishams.
In Sen. Tillis’s column about the Child Tax Credit, he wrote “the devil is in the details.”
Unfortunately, “the devil in the details” that Sen. Tillis fails to recognize or acknowledge is that he is essentially advocating for: (1) stripping the Child Tax Credit away from children and families like the Grishams, who have lost everything, due to their loss of income and livelihood of their families; and, (2) imposing the “triple-whammy” on babies and families with cuts to their Child Tax Credit due to reduced income related to having a baby.
So does Sen. Rubio, who says he wants to offer an amendment to “strike the ‘look back’ option” and “strike the per-child phase-in scheme.” Again, families like the Grishams (and other children and families impacted by other natural disasters like hurricanes) and parents having babies would be negatively impacted by Sen. Rubio’s amendment.
Public policy that involves children should always prioritize the best interests and well-being of children. That should be a fundamental requirement. And by overwhelming margins, the American people agree.
Source: Lake Research Partners Poll, May 2022
Public policy should never be cruel and heartless. Children and families deserve better from their policymakers.
The consensus is clear, and so is our path forward. It's time to act decisively and compassionately. The Senate should immediately pass H.R. 7024 without detrimental amendments to the well-being of children. Our children's future is not a bargaining chip — it's our collective responsibility.
For a more detailed analysis of the history and the continued need to improve the Child Tax Credit, First Focus on Children has published an issue brief entitled The Child Tax Credit and Its Potential Impact on the Lives of Children and Future of the Nation.
To obtain deeper insights into shaping policy that best supports children through the Child Tax Credit, check out 🎧 Episode #11 of the Speaking of Kids podcast, “Child Poverty in a Policy Decision with Megan Curran and Sophie Collyer.” They explore how improvements to the Child Tax Credit should be made to make significant progress in cutting child poverty in this country.
If you would like to help ensure that children and their needs, concerns, and best interests are no longer ignored by policymakers, please join First Focus Campaign for Children as an “Ambassador for Children” or become a paid subscriber to help us continue our work. We do not have dedicated financial support for this work and rely on readers like yourself to support it. Thank you for your consideration.