Jacobin - February 5, 2021
On Thursday, Rashida Tlaib and Mondaire Jones introduced the End Child Poverty Act. The ECPA is by far the best child allowance proposal introduced in Congress and should serve as a blueprint for future Democratic efforts in this area of policy.
Current law delivers basic cash benefits to American families through three main tax credits: the Earned Income Tax Credit, the Child Tax Credit, and the Credit for Other Dependents. These credits are extremely complicated, duplicative of one another, and not available to the poorest families in the country.
The ECPA replaces this current tax credit mess with the following new programs:
- A universal monthly child allowance set equal to the difference between the one-person poverty line and the two-person poverty line, which is currently $393 per month. This benefit would be paid out by the Social Security Administration (SSA) using the same rules that the SSA currently uses to pay out Supplement Security Income (SSI) and Survivors benefits to children. Children would be enrolled in the program at birth at the same time that they apply for their Social Security number.
- An annual $600 fully refundable credit for adult dependents. This replaces the current nonrefundable $500 credit for adult dependents.
- An annual $600/$1,200 fully refundable credit for single/married tax filers that phases out at $20,000/$40,000 of income. This replaces the non-child aspects of the current EITC and ensures that no family is cut back from their current level of tax credit benefits.
This policy would dramatically reduce child poverty in the United States. Relative to the current baseline, I estimate that child poverty would decline by two-thirds. ...
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