A History of Child Tax Credits

Originally posted on Medium | Photo by Ehimetalor Akhere Unuabona on Unsplash

We are focusing a lot of attention in our new podcast on child tax credits — arguably, the most efficient way to reduce child poverty. The podcast is called The Invisible Americans. You can find it wherever podcast ae available.

Many other rich nations utilize such a policy with more success over time — instead of abandoning them as we did in America. Those nations typically bring the average child poverty rate down much lower than current rates in America because of these tax credits.

Earned Income Tax Credit and Child Tax Credit

President Ford enacted the EITC program in 1975, and the CTC followed soon after for children of poor families. The amount of cash provided to children is a percent of family income, and it has increased over time.

During the COVID-19 pandemic, policymakers worked to revamp the CTC. The new CTC of 2021 was much more generous than the original policies.

In 2021, the new CTC reduced the rates of child poverty by more than 40 percent. Such an astonishing, stunning success for a social policy program is almost unprecedented. The benefits of the CTC reached almost every child in America.

But despite accolades, America dropped the plan after only a year. As we shall explore over the next year on this podcast, America’s poverty cynicism came into play.

Myths around the expanded CTC

• It is too costly! Total estimates for CTC spending came to less than $100 billion annually. That would be much less than the Supplemental Nutrition Assistance Program.
• It creates dependency on government and disincentivizes work! Despite this common rhetoric, those who receive help from the government in any form are generally not unemployed. Rather, they’re under-employed.
• Parents won’t spend the money on their children! Research on these programs in the U.S. and Europe shows that is simply not the case.
• No one wants this! Support for these programs is high among bipartisan voters and among those who wouldn’t directly benefit from it.

What to expect from our podcast

These types of political myths are often reinforced by rightwing scholars. Some of our guests will show to the contrary and tell stories of their experiences working in this field. We will try to present the many sides of arguments.

We will also explore what we feel to be the heart of the issue: the cause of poverty is the lack of American compassion for the poor.

Poverty is not inevitable. It is a social and political choice. Do Americans fail to see how being poor contributes to lifelong disadvantage, from childhood onward? Why is this so? It is — sadly — not easy to explain.

We hope to help Americans have more compassionate towards the poor and show them how poverty limits freedom — in particular, the freedom of choice to pursue a range of opportunities through education, of investing in one’s health, in choosing careers, in geographical mobility.

Do Americans fail to see how being poor limits so much beginning in childhood? Or do they refuse to see how it creates personal shame and bodily pain for kids?

Child poverty is not the fault of the kids. The nation should keep this foremost in mind, as we do as we make this podcast.

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