Last year, Congress walked away from what looked like one of the most effective solutions to child poverty in a generation. Now, state legislators are trying to roll it back. Lawmakers in at least 10 states are considering some new version of the expanded child tax credit, a federal program that lifted millions of children out of poverty but was then abandoned by Congress. In 2021, parents received up to $300 monthly for each child and this reduced the financial burden on families while dramatically reducing child poverty.
Many states have child tax credits on the table
States organized by child tax credit status
|The governor or legislator is interested in creating a new program|
|Arizona, Connecticut, Hawaii, Illinois, Maryland, Minnesota, Missouri, Montana, Nebraska, Oregon|
|Expansion of pre-existing programs is possible this year|
|Colorado, Massachusetts, New Jersey, New Mexico|
|There are pre-existing programs but no extensions on the table|
|California, Idaho, Maine, New York, Oklahoma, Vermont|
But reviving the program is divided at the state level — just as in Congress, lawmakers are divided over how generous the payments should be and who should be eligible. Each state will make its own decisions, and politics is not straightforward.
Politicians and advocates initially thought that giving cash benefits to all parents would be as popular as a program like Social Security, according to Andrea Campbell, a political science professor at MIT who studies tax politics. But instead, it has been compared to welfare by conservative politicians and activists, putting it on more difficult political terrain. “Aging is inevitable — it happens to everyone,” Campbell said. “But having children is seen as a choice and not necessarily something our government is responsible for supporting.”
State-level politicians, who are proposing all kinds of tax cuts and exemptions for their constituents this year, have plenty of incentive to try where Congress has failed. The extended child tax credit was fairly popular overall, and parents were particularly excited about it. According to a Morning Consult poll conducted in July 2022, 59 percent of Americans supported bringing back monthly payments of up to $300 — including 75 percent of parents with children under 18. Aidan Davis, state policy director at the left-leaning Institute on Taxation and Economic Policy, said congressional inaction on the federal child tax credit has created an opening for state lawmakers to implement a policy that’s both popular and effective — which sounds like political gold. That may explain why a similar version even has bipartisan support in deep-red Montana, where Republican Gov. Greg Gianforte included a $1,200 annual child tax credit as part of his state budget proposal.
“[The federal expanded child tax credit] had a big and immediate impact on child poverty, and people really liked it,” Davis said. “So it doesn’t look like Congress could renew it, which means that states are more motivated to push for something similar within their own borders. “
But the idea of giving a large group of Americans no-strings-attached money is still politically complicated. Although there was widespread support for the expanded child tax credit, Americans were not appreciative of it—at least politically. Polling from Morning Consult throughout 2022 shows that while Democrats, who controlled Congress when the policy was passed, were able to gain an edge among child tax credit recipients shortly before the November midterms, many voters who received the payment still support Republicans: according to Polls In a nearby poll, 51 percent of child tax credit recipients were planning to vote Democrat in the midterms (compared to 46 percent of overall voters), while 40 percent of child tax credit recipients were planning to vote Republican (compared to 43 percent of all voters).
Perhaps that discrepancy may explain why many of the proposed state-level credits are more limited than the federal version. Under the Lapsed Child Tax Credit expansion, most families would receive between $250 and $300 per child per month. Many states are considering more modest payments, sometimes with income caps that would reduce the number of eligible households.
The new states passing a child tax credit will join a small group that have already made it a priority According to ITEP, ten states currently have a child tax credit, including three states that implemented the program last year. It’s still early in the legislative session, so there’s plenty of room for things to move, but right now ten additional states are considering a child tax credit — plus lawmakers in Massachusetts, New Mexico, Colorado and New Jersey are discussing expanding their existing credits.
However, not all tax credits are created equal. There are already big differences between some of the child tax credits already on the books — for example, three states have a tax credit for children that is nonrefundable, meaning families without taxable income can’t receive the credit as a refund, preventing many low-income families from benefiting. . (Proponents want it set up so that payments go to working people, even though evidence shows that child tax credits have a larger impact on child poverty when poor families receive them.) Some are more generous than others — Oklahoma’s nonrefundable child tax The credit is $100 per child annually, while in Vermont it is $1000 per child and is fully refundable. Some states only offer the credit to children under six, and others have income caps for eligibility.
The child tax credits that have been floated this year also vary in their inclusion and generosity. Montana’s governor-backed child tax credit is $1,200 for each child under six — far more than most states offer — but it will only be fully available to families with incomes of $50,000 or less. Massachusetts’ newly-elected governor, meanwhile, has pledged to increase the state’s child tax credit by $600 per child under 13, with no income limits.
These differences are uncomfortable, but they have implications for how far-reaching and effective the policy can be. According to Davies, it is particularly important to ensure that children under the age of six are covered as there is evidence that they benefit the most from the Child Tax Credit. Excluding middle-income and wealthy families means fewer people will qualify, but experts say the impact on poverty reduction could still be large. Legislators have to work out those tradeoffs — for example, do they want to include fewer people, but pay bigger, or include more people and pay smaller?
The fact that many legislators and governors are still talking about the child tax credit is a sign that congressional inaction hasn’t poisoned them politically. And while most efforts to establish or expand the child tax credit are happening in blue states, it’s sometimes a bipartisan affair. Rose Bender, director of research at the Montana Budget and Policy Center, told me that Gianforte’s office is emphasizing the need for more support for families. “The message is, ‘Children are expensive and costs are rising,'” she said.
Campbell said people may be more open to tax credits that are designed for their state’s specific needs, noting that federal taxes tend to be more taxing than state taxes. “People understand that the residents of this state prefer more [them],” she said. And the different nature of the credits in different states could also be a bonus — proving to voters that this isn’t a one-size-fits-all program.
The fate of this year’s batch of proposed child tax credits — whether they go forward, if they’re watered down, whether they ultimately pass — will have ramifications for millions of families across the country. But it’s a second chance for politicians to test whether voters will actually reward them. Many Americans are deeply skeptical of government handouts to low-income people — often influenced by negative, sometimes racist stereotypes about poor people and single mothers. Some lawmakers have denounced the federally expanded child tax credit as an expensive welfare program, and as Alex Samuels and Neil Lewis Jr. wrote for FiveThirtyEight last year, hostility toward the people most in need of government assistance permeates social thinking among both Democrats and Republicans. Safety net.
But childcare costs is Rising, children is It’s expensive, and some politicians — including conservative Republicans like Gianforte — clearly think helping families with their state’s social safety net is a worthwhile endeavor. And if they succeed, it could set the stage for more states to consider similar proposals in the future.