The year 2017 saw the most significant one-year decrease in child poverty in the history of the world. However, it is crucial to remember that the child tax credit programs will expire in 2021.
Imagine that the holidays are right around the corner. While many people are searching on the internet in search of “holiday gift guides,” some families are researching “local holiday meal distribution free” and “utilities assistance.”
Despite the attention that has been paid recently to who will be in control of the next Congress, the present Congress is still able to make history yet again and tackle the issues with the same method that has been tried previously and has tested and proven effective and is currently in the works.
The extended child tax credit with monthly payments was made available to 65 million kids in a record-breaking forty million families in the United States. This one piece of legislation made it possible to raise 5.3 million Americans from poverty, which included 2.9 million kids.
Child poverty decreased by a staggering 46% in the last year.
The expansion was based on the number of children in a household and the income earned from the previous tax year. It also provided an annual income boost distributed throughout the year from half of a family’s tax credit for children. In the past, families had to be patient until tax time and struggled to pay the bills until they could receive the entire tax break in one go.
As per U.S. census data, the child poverty rate fell by an astonishing 46% in the last year. It was the most significant one-year decrease in child poverty in the history of the world. It is crucial to remember that these tax credits for children will expire in 2021.
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Despite the severe reservations of certain government officials fueled by stereotypes of a negative character, research has shown that the child tax credit benefits worked in the way they were intended to. It has helped reduce the financial burdens faced by families with lower incomes which can be disproportionately detrimental to those in marginalized communities.
The new laws helped make allowances for the historical injustices in economics. In the United States, the percentage of children who live under the federal poverty line dropped to the lowest levels in history for whites who are not Hispanic (2.7 per cent), Black (8.1%) and Hispanic (8.4 percentage) children. Many parents took advantage of this freedom and flexibility to cover expenses like clothing, child care, and transportation.
By 2021 the child tax credit, which includes monthly payments, was made accessible to 65 million children in a record forty million households throughout the United States. This law has helped raise 5.3 million Americans from poverty, including 2.9 million children.
According to the Census Household Pulse Survey:
Thirty percent of the families who received the tax credit for children spent it on school costs.
About 25% of the money was spent on childcare expenses.
Forty percent of households were able to pay off debt.
Most participants spent at least a small portion of the credit on food items.
40% of the money was used for rent, mortgages or utilities.
The Center on Budget and Policy Priorities discovered that over 90% of the families earning less than $35,000 per year took advantage of their monthly child tax credit to pay to cover the most basic costs, such as food, shelter, clothing as well as utilities and education.
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What’s the negative news?
The truth is that this program worked! It performed exactly as it was supposed to. It served it very well. What’s the negative news?
As these laws expired in December 2021, a little over one year since the last time, parents are finding it difficult to pay for childcare costs, forcing some to leave work to take care of their children. , The global economic crisis has made most necessities (including utility bills and food) more expensive. Something we’re confident you’ve already observed.
The cost of living is high, which is exacerbated by the rise in inflation and the ever-present risk of a recession and the housing crisis will not suddenly improve anytime very soon.
All of this is devastatingly impacting people currently facing financial difficulties. In comparing the first quarter of September 2021 (with the expanded tax credit for children in place) to the beginning of this month (without the credit being extended). The percentage of people who claimed they weren’t working primarily due to caring for a child who was not in school or daycare has increased by 4.4 million to 4.5 million.
In addition, the number of families with children that reported frequently or at times not eating enough was up from 9 million to over 11 million in the United States.
Read more: Effect of revenge spending: household savings fall to a five-year low at 2022.
Big Business wants Congress to increase tax breaks for wealthy corporations. It has bipartisan support, but it’s unconstitutional to overlook the tens of millions of American families who struggle to survive.
Brendan Bow volunteers with RESULTS to fight poverty. He is an analyst of programs for the Center for Research on Inclusion and Social Policy and also serves as an adjunct professor for IUPUI (Indiana University-Purdue Indiana University). Ruhani Sansoya is a third-year medical student at the IU School of Medicine and advocates with RESULTS. The RESULTS organization is committed to eliminating the cycle of poverty.
