Child tax credits are worth the cost

Child tax credits are worth the cost

The American Rescue Plan Act expands the federal Child Tax Credit by increasing the amount that families with children receive and by providing it as a monthly benefit – similar to child allowances seen in other countries. The expansion is estimated to cost $100 billion per year, but it’s an investment that will pay long-term dividends by reducing child poverty and the future costs associated with growing up in a household that struggles to provide basic necessities. H. Luke Shaefer and Kathryn J. Edin, argue in an essay for The Atlantic, that Congress should make the expansion permanent instead of letting it expire at the end of this year: 

Plenty of evidence from other countries shows us that the benefits of an expanded child tax credit can be sustained. The United Kingdom adopted a new child tax credit, among other poverty-reduction programs, in the late 1990s and saw its child-poverty rate fall by 50 percent. Canada greatly increased its child benefit in recent years and also saw its child-poverty rate fall dramatically. Some legislators worry that families will make bad choices with the cash, but evidence from Canada suggests that families reduced spending on things like alcohol and tobacco when they received child benefits, which supports the theory that substance use is sometimes a response to financial stress. 


School should be safe for all children
The House Education Committee rejected legislation Tuesday that sought to ban transgender children from playing on gender-appropriate school sports teams. While the author of House Bill 542 claimed the bill would promote fairness in women’s sports, the legislation would discriminate against transgender youth and would likely have had negative impacts on their mental health. JC Canicosa of the Louisiana Illuminator reports:

Dr. Nithya Ravindran, a psychiatry fellow at Tulane University who spoke in opposition to the bill, said the long term mental health impacts of losing a game or not winning a title is probably minimal, but “research consistently demonstrates that gender-diverse youth who are supported to live and explore the gender role that’s consistent with their gender identity have better mental health outcomes.” “To add to the risk of mental illness with bills like this that further discriminate against trans-kids would be especially harmful,” Ravindran testified, “especially in a space where we want kids to feel safe and supported and to learn and grow.”

A separate bill – House Bill 324 by Rep. Stephanie Hilferty – sought to ban corporal punishment in Louisiana public schools, but died on the House floor. Research consistently shows that spanking and hitting children as punishment can make them more aggressive and reduce grey matter in their brains. Currently, 29 school districts use corporal punishment, which Hilferty says is disproportionately used on male and Black students. Will Sentell writes in The Advocate:

Officials of the (Louisiana Association of School Superintendents) said they favor retaining the local option. Rep. Danny McCormick, R-Oil City, criticized the measure. McCormick said banning spanking and other forms of punishment could pave the way for the state to curb the rights of parents to discipline their children at home. “It sets a dangerous precedent,” he said. Hilferty said the American Academy of Pediatrics opposes corporal punishment because of its harmful impact on children. She also noted that the state bans the hitting of youngsters in Louisiana’s juvenile justice system and state prisoners.


Mississippi increases TANF benefits
The Mississippi Legislature has increased the maximum monthly cash assistance available through the Temporary Assistance for Needy Families (TANF) program from $170 to $260 for a family of four – the first increase in more than 20 years. Mississippi’s previous maximum benefit was the lowest in the nation, but the increase now places the Magnolia State ahead of Louisiana’s maximum of $240 per month. TANF benefits have historically been the lowest in the South, where states instead use the flexible federal grants on everything from early childhood education to deterring women from having abortions. Bobby Harrison of Mississippi Today has more

While Mississippi is the poorest state in the nation, only between 2,500-3,000 families are normally in the TANF program, [Mississippi Department of Human Services Executive Director Bob] Anderson said earlier this session. In addition to increasing the benefits, Anderson has said he wants to re-evaluate the criteria for determining eligibility. “We are in the midst of this pandemic,” Anderson said earlier this session. “We think this is an opportune time to provide this assistance for our TANF families… for the poorest of the poor in our state.”


Census data and workforce mobility
Louisiana’s population increased by 125,000 people over the past decade and actually declined over the past five years as oil prices plummeted. Only Mississippi and West Virginia, which lost population, saw slower growth among Southern states, while people continued to flock to places like Texas and Florida. As The Advocate notes in an editorial, the traditional ways that Louisiana has tried to attract jobs and businesses – by throwing financial incentives at big corporations – are no longer working. 

Workforces are becoming more mobile, as was demonstrated during the pandemic, which means states like Texas and Florida will gain even more advantages. The old model was that businesses controlled where the jobs are, and states lured them with tax breaks. The new model will be that employees control where the jobs are, so the states that win will be the ones that are seen as great places to live. In his books about the “creative class,” analyst Richard Florida suggests that social tolerance, advanced technology and talent would remake society; the pandemic did not invent those trends but is probably accelerating them. 


Number of the Day
$260 –
Mississippi’s new maximum monthly cash benefit for a qualifying low-income family of three, $20 higher than Louisiana’s maximum of $240. (Source: Center on Budget and Policy Priorities)