Baby tax credit score begins hitting households’ financial institution accounts | Nation
WASHINGTON – The child tax break has always been an empty gesture for millions of parents like Tamika Daniel.
That all changed Thursday when the first payment of $ 1,000 hit Daniel’s bank account – and dollars began pouring into the pockets of more than 35 million families across the country. Daniel, a 35-year-old mother of four, didn’t even know the tax credit existed until President Joe Biden extended it for one year under the $ 1.9 trillion coronavirus aid package passed in March.
Previously, only those who earned enough money to pay income taxes could qualify for the loan. Daniel was out of a job for almost a decade because her eldest son is autistic and needed her. So she got by with social security contributions.
But the extra $ 1,000 a month for the next year could be a life-changing result for Daniel, who now works as a community organizer for a nonprofit. It helps to leave a deposit for a new apartment.
“It actually comes on time,” she said. “We have big plans. That definitely helps to relieve yourself. “
Biden has cited the new monthly payments averaging $ 423 per family as key to halving the child poverty rate. But he also wages a broader philosophical battle about the role of government and parenting responsibilities.
Democrats see this as a landmark program in the same vein as Social Security, saying it will produce better adult outcomes that will fuel economic growth. However, many Republicans warn that the payments will deter parents from working and ultimately lead to long-term poverty.
Around 15 million households now receive the full loan. Monthly payments are $ 300 for each child under the age of 5 and $ 250 for children between the ages of 5 and 17. The payments are set to expire after a year, but Biden is pushing to extend them until at least 2025.
The president wants to make the payments permanent after all – and that makes this first round of payments a test of whether the government can improve the lives of families.
Florida Republican Senator Marco Rubio, who successfully campaigned for a loan increase in 2017, said Democratic plans will turn benefits into an “anti-labor welfare check” as almost every family is now eligible for payment regardless of whether the parents have a job.
“Biden’s plan not only foregoes marriage incentives and work requirements, but also destroys the child support enforcement system as we know it by sending cash payments to single parents without ensuring child support orders are issued,” Rubio said in a statement Wednesday .
The administration denied these claims. Treasury estimates show that 97% of recipients of the tax credit have wages or income from self-employment, while the other 3% are grandparents or have health problems. The loan also starts to expire at $ 150,000 for joint applicants, so the poor have no incentive to work because a job would only bring them more income.
Parenthood is an expensive endeavor. The Department of Agriculture estimated in 2017, the last year it released such a report, that a typical family would spend $ 233,610 to raise a child from birth to 17 years of age. But wealthier children invest much more in their education and upbringing, while poorer children are at a constant disadvantage. Families in the top third of income spend about $ 10,000 more per child annually than families in the bottom third.
The child tax withholding was created in 1997 to be a source of relief, but it has also become a driver of economic and racial inequality, as only parents who owe taxes to the federal government are eligible for full payment. Academic research in 2020 found that about three-quarters of white and Asian children were eligible for full credit, but only about half of black and Hispanic children.
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