Photo illustration by Thomas Hamilton III.

December 16, 2019; New York Times


We’ve all heard of people earning too much money to qualify for needed federal benefits…but can you also earn too little? Apparently, when it comes to the child tax credit, the answer is yes; families in greatest need are being left out.

Sophie Collyer, David Harris, and Christopher Wimer, all three based at the Center on Poverty and Social Policy at Columbia University, released a paper earlier this year that documents serious shortfalls in the nation’s child tax credit policy. Titled Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit, it says that families who most need the financial support that the child care tax credit provides get less than families who are financially better off.

This is no small matter. As Jason DeParle writes in the New York Times, “The credit now costs the federal government $127 billion a year—far more than better-known programs like the earned-income tax credit ($65 billion) and food stamps ($60 billion).”

The 2017 tax bill doubled the amount of the credit from $1,000 per child to 2,000 per child; it also increased the maximum income a family could earn and still claim the credit from $110,000 a year to $400,000 a year. The cost of these changes was $73 billion. However, 39 percent went to families in the top quintile and 2 percent to those at the bottom, according to Elaine Maag of the bipartisan Tax Policy Center.

In short: millions of Americans earn far too little to qualify for the $2,000-per-child credit. A single mother earning $15,000 with two children, DeParle writes, only received $934 a child, a modest $75-a-child increase from what she would have received the year before. All told, Collyer and her colleagues estimate that 23 million children and their families get less than the $2,000 benefit.

In theory, the idea behind this policy is that credits rise with earnings to incentivize adults to join and succeed in the workforce and discourage welfare. Collyer and her colleagues, however, label this a “significant flaw in its design.” Their data found “a quarter get a partial sum and 10 percent get nothing. Among those excluded from the full credit are half of [Latinxs], 53 percent of blacks and 70 percent of children with single mothers.”

This policy shows the same lack of understanding, lack of depth, and lack of empathy demonstrated by our current politics. The idea is that those who need help in our country should either help themselves or get help from somewhere else. The problem with this line of thinking is that typically “other sources of aid” means other parts of the public sector such as nonprofits or quasi-governmental organizations and services. Most of those are still supported by taxpayers in some way or another. For example, if a child is not getting proper meals at home, they will have food available for them at their public schools, at a public library, or at another afterschool program—all of which taxpayers support.

Many nonprofits also rely on taxpayers via government grants to support their programs. So, those very “other sources of aid” that support children from families in need are still supported by the taxpayers. Of course, many of these nonprofits are under-resourced and overworked, creating gaps in care.

Most importantly, the Columbia researchers found that this policy hurts families and children of color and single-parent-home families the most. Disadvantaged groups that would get a boost from our government investing in them are yet again marginalized, trivialized, and lectured via policy and lawmakers.

The chance to do better clearly exists. DeParle highlights a report titled A Roadmap to Reducing Child Poverty from the National Academy of Sciences (NAS), which found that raising incomes of poor families has “been shown to improve child well-being.”

DeParle calls the NAS report a “meta-study,” as its recommendations were based on findings from dozens of other studies. Those studies demonstrate that child tax credits lead to “better test scores and graduation rates, less drug use, and higher earnings and employment as adults.” The NAS report adds that giving the full $2,000 credit to low-income families would cut child poverty by 26 percent. DeParle adds, “At least 17 wealthy countries provide a child allowance, including Australia, Ireland, and Britain. After a 2016 Canadian expansion offered up to $6,400 per child, the country’s child poverty rate fell by a third.”

The question, as is often the case with government policy, is a matter of values.  Reducing child poverty is something that is easily within reach. Simply changing the formula of a single tax credit program could lift millions of children out of poverty.—Sarah Miller and Steve Dubb