Tuesday, March 2, 2021

Benefits of Expanding Child Tax Credit Outweigh Small Employment Effects

 March 1, Center on Budget and Policy Priorities

The House-passed COVID-19 relief bill, the American Rescue Plan, would temporarily increase the Child Tax Credit and make the full Child Tax Credit available to all children except those in families with the highest incomes (sometimes called making the credit “fully refundable”). This proposal would markedly reduce the number of children with incomes below the poverty line while narrowing the gap in poverty rates between white children and Black and Latino children. The strong benefits of the proposal far outweigh any potential reduction in employment. Researchers assessing a very similar proposal estimated that more than 99 percent of low- and moderate-income working adults affected by the proposal would remain employed after it takes effect.

For the full analysis, go here