Last week, President Biden circulated his American Families Plan—part of his broader Build Back Better plan to get Americans succeeding again. It was unveiled after more than a year of a worldwide pandemic and stagnant economic growth over decades for our low- and moderate-income households, especially households of color. We are grateful that in this plan, President Biden pushed for a permanent expansion of EITC and a permanently refundable CTC so that our lowest-income families get the full amount of the credit.
But we are disappointed that it did not advocate making permanent all the expansions to the CTC (Child Tax Credit) and the EITC (Earned Income Tax Credit) made in the previous American Rescue Plan . For example, those boosted CTC payments–the ones that are $3,000 for children from ages six to 17 and $3,600 for kids five and under—are going to go back down to $1,000 per child in 2025. Why? Because we’ve been told that to keep them at that higher amount is just too expensive. Our country cannot afford it, they say. This is simply “a math problem,” and the numbers just don’t add up, is the justification.
Yes, we know that math can be hard. But investing in children shouldn’t be. At Prosperity Now, we believe that kids deserve every opportunity to succeed, and these early investments will better ensure that success. We need to prioritize those who matter and put our money where the needs are—in this case, towards vulnerable low-income children and children of color who could greatly benefit from these permanent expansions. Tax credits improve outcomes for household members from early childhood through retirement. These targeted credits lead to better infant health, improved school test scores for children, boosted college enrollment and increased earnings as adults. If we are determined to turn our tax code right-side up, we need the expansions to the CTC and the EITC to be made permanent.
Even before the pandemic, families were floundering. Forty-five million households (37% of all U.S. households) were “liquid asset poor” prior to the pandemic, meaning they did not have the resources to subsist for three months at the federal poverty level if they suddenly lost their ability to earn an income. For families of color, these numbers were even more staggering: 58% of Black and Latinx households were in liquid asset poverty due to systemic barriers and decades of racist policies that marginalize people of color.
Making permanent the American Rescue Plan’s expansions of the EITC and CTC would not only extend the opportunity-boosting success of these tax credits, but it would also help to bring greater equity to our largest asset-building tool: the U.S. tax code. For example, before the passage of the American Rescue Plan, about half of all Black and Latinx children received only a partial CTC or no credit at all because their families’ incomes were too low to qualify for the full credit. This next year, because the credit is fully refundable and available immediately to all eligible households, the CTC will not only support families previously left out but will cut overall child poverty by 45%—including by 52% for Black children, 45% for Hispanic children and 61% for Indigenous children.
Join Prosperity Now and our incredible partners fighting to make all of the CTC and EITC expansions from the American Rescue Plan permanent. Together, this is one math problem that we can afford to solve.
Originally posted by Prosperity Now on 2021-05-04 19:00:00