Children in Greatest Need Are Least Likely to Benefit From Expanded Tax Credit Under Trump

Trump and Republicans only "expanded" the child tax credit for wealthy families. They left out 26 million children whose parents work hard but whose companies don’t pay them enough.

The 2017 tax bill, Trump’s main domestic achievement, doubled the maximum credit in the two-decade-old program and extended it to families earning as much as $400,000 a year (up from $110,000). 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).

But children with the greatest economic needs are least likely to benefit.

While Republicans say the increase shows concern for ordinary families, 35 percent of children fail to receive the full $2,000 because their parents earn too little... A quarter get a partial sum and 10 percent get nothing. 

Among those excluded from the full credit are half of Latinos, 53 percent of blacks and 70 percent of children with single mothers.

“The child tax credit is the largest federal expenditure for children, but it excludes from the full benefit the kids who need it the most,” said Sophie Collyer, a member of the research team at Columbia, who analyzed the program. “This is a significant flaw in its design that’s at odds with the administration’s claims about the achievements of the tax bill.”

The child tax credit, begun in 1997 as a tax cut, has become an anti-poverty program. But more than a third of children don’t receive it because their parents earn too little.

Because the credit rises with earnings, a single parent with two children has to earn more than $30,000 a year to collect the full amount.... a majority of congressional Democrats have backed a bill to increase the credit and include both the working and nonworking poor, essentially creating a guaranteed income for families with children.

“It left out 26 million kids” from the full sum, said Senator Michael Bennet, a Colorado Democrat who has helped write a bill to raise the credit to $3,000 per child ($3,600 for those under 6) and pay a portion monthly. “It’s critical that we don’t leave it as a half measure. Our entire conception of ourselves as a land of opportunity is diminished by the fact that our child poverty rates are as high as they are.”

Source: https://www.nytimes.com/2019/12/16/us/politics/child-tax-credit.html