“Child Tax Credits (CTCs) are an important way lawmakers can help families to make ends meet, help children thrive now and in the future, and help families and communities recover from the pandemic”, wrote the Center on Budget and Policy Priorities (CBPP) on its website.
The CBPP, which is a progressive American think tank that analyzes the impact of federal and state government budget policies, noted that federal credit should be expanded, and that states should also create and improve their own CTCsamong other tax credits that help low-income households.
Until now nine states have already enacted and funded a CTC and continue executing new loans and improving existing ones.
“Last year, Colorado implemented and funded its CTC, which families will be able to claim for the first time when they file their 2022 taxes early next year, and Maryland created a new Child Tax Credit for families with children with disabilities. New Mexico recently created a credit with a maximum value of $175 per child this year; the full credit is available to families with little or no income (also known as the ‘fully refundable’ credit),” details the CBPP.
Reasons More States Should Stick With Child Tax Creditsaccording to the CBPP’s arguments:
Reduce poverty and help families pay for the basics
Research has found that monthly CTC payments provided through the American Rescue Plan dramatically reduced child poverty and helped families cover basic needs such as food, utilities, clothing, rent and education-related costs. CBPP estimated that the expansion of the 2021 federal CTC of the Rescue Plan in the Rescue Plan lift 4.1 million children, including 1.2 million African American children and 1.7 million Latino children, above the federal poverty line.
Support the healthy development of children and families.
According to several studies, additional income such as CTC, are associated with better healthas they lead to significant improvements in access to nutritious food, maternal and child health, the number of years of education children complete, and reduced stress in low-income families.
Boosting local and state economies
CTCs help low-wage families meet their needs while supporting local businesses and state economies. The result of the supports can generate higher incomes later in life and increase the ability of individuals to contribute to the economies of their neighborhoods and the state as workers, entrepreneurs, innovators, and community members.
“Federal and state child tax credits are an effective way to target tax breaks to the people and communities that might need the help the most.”says the CBPP. “People of color, immigrants and women are among those who have been disproportionately affected by the economic downturn.”
The CBPP notes that the costs of enacting or enhancing existing credits are also often small enough that states can absorb them without generating additional revenue: “If modest additional resources must be raised, states may choose from a variety of sensible ways to do it. Either way, the substantial long-term benefits of child tax credits to families, communities, and local economies are well worth it”.
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