Bold Plan to End Child Poverty Includes Expanding Tax Credits for Working Families
By Lauren Pescatore
Improving tax credits for working families is a key component of a broader policy agenda to drastically reduce the number of American children living in poverty, according to a new report from the Children’s Defense Fund.
Acknowledging that the majority of poor children live with at least one working family member, Ending Child Poverty Now recommends improvements to nine existing policies that have been proven to increase employment, make work pay more for adults with children, and meet children’s basic needs. The policy levers include increasing the minimum wage, expanding the Supplemental Nutrition Assistance Program (SNAP) and housing vouchers, and improving tax credits for working families. Specifically, the report recommends increasing the Earned Income Tax Credit, making the Child Tax Credit fully refundable with additional benefits for families with young children, and making the Child and Dependent Care Tax Credit refundable with a higher reimbursement rate.
Enacted together, the improvements would reduce child poverty by 57 percent and lift 5.5 million children out of poverty entirely. Importantly, they would also address the fact that poverty disproportionately affects children of color, lifting 65.4 percent of Black children and 59 percent of Hispanic children out of poverty. According to the report, these combined improvements would cost roughly $52.3 billion per year, “a bargain our nation – which approved nearly $2 trillion in tax cuts for the wealthiest individuals and corporations in 2017—can easily afford.” To cover the cost, the report recommends unwinding certain provisions of the 2017 tax bill that disproportionately benefited wealthier individuals and corporations.
Read the full report, as well as a state-by-state analysis of all nine policy recommendations, here.