The Child Tax Credit Is Great For Parents And For Turning Out The Vote
During the pandemic, an expanded Child Tax Credit provided material relief for working families. Congress let the measure expire, but it remains popular with voters.
J. Patrick Patterson
child tax cred•it
noun
1. A U.S. tax break for families based on income and number of children
How’s it work?
As it stands, the federal Child Tax Credit provides families with up to $2,000 for each qualifying child at tax time. Up to $1,700 of that credit is “refundable” in 2024, which means the family can claim it even if they don’t have taxable income.
The Child Tax Credit is a massively popular idea, with 71% of voters (or 66% of Republicans and 79% of Democrats) supporting its expansion. It’s no wonder why: Wages haven’t kept up with the cost of living, and the average cost of childcare is around $11,000 each year. Families are hurting.
What’s the history?
The Child Tax Credit once saw big bipartisan support. In 1991, the bipartisan National Commission on Children recommended a $1,000 refundable credit for children through age 18, and Republicans even suggested a $500 credit in their 1994 Contract with America.
Finally, in 1997, the Taxpayer Relief Act established Child Tax Credits. In 1998, families saw a $400 credit per child, which was “nonrefundable” — meaning families had to first owe $500 in income tax to claim the full amount. It grew to $1,000 per child in 2001, and $2,000 in 2017.
The pandemic-era American Rescue Plan expanded the credit to $3,000 per child, fully refundable, in 2021 — which cut the child poverty rate down to historic lows. But Congress let the credit expire, and the child poverty rate more than doubled in 2022.
Wait. Why did Congress let it expire?
Republicans, along with then Democratic Sen. Joe Manchin, refused to extend the credit because, they claimed, it discouraged parents from working. (This argument has been widely debunked, including by the National Bureau of Economic Research.) In August, Senate Republicans again blocked a bipartisan bill to make the 2021 expansion permanent.
Despite this setback, Democrats could benefit from pushing for a bigger and better Child Tax Credit to help address the cost-of-living crisis, a message that proves very effective with voters, according to a survey by Democracy Corps. In fact, expanding the Child Tax Credit is one of the most compelling messages for working-class voters under 50.
This is part of “The Big Idea,” a series offering brief introductions to progressive theories, policies, tools and strategies that can help us envision a world beyond capitalism.
J. Patrick Patterson is the Associate Editor at In These Times. He has previously worked as a politics editor, copy editor, fact-checker and reporter. His writing on economic policies and electoral politics has been published in numerous outlets.
