The views expressed by contributors are their own and not the view of The Hill

Work requirements for the child tax credit are draconian and counterproductive

In order to ensure that all families have the opportunity to prosper, we must identify and eliminate the racialized inequities perpetuated by our current tax system and replace current structures with an emphatically anti-racist framework. We can begin to address these inequities by refusing policies like the work requirements and means testing recently proposed by Sen. Joe Manchin (D-W.Va.). Regulations such as these would threaten the future impact of the expanded child tax credit — a highly effective measure that has already improved the lives of millions of families and will continue to live children out of poverty.  

On March 11, President Biden signed the American Rescue Plan which, among other important provisions, made the child tax credit fully refundable for a year. This provision improved the financial situation for America’s lowest-income households, who would otherwise not have access to this critical credit by providing them with an advance monthly payment in addition to a tax-time lump sum. In fact, the child tax credit’s refundability had a direct positive impact on children of color. Prior to the credit’s expansion, nearly half of all Black and Latinx children were excluded from the full benefit as their collective household did not owe enough federal income tax to qualify. In 2021, it was made available to all families.  

Expanded access to the child tax credit makes a tremendous difference for families’ wellbeing, and years of research and data provide ample evidence of that. Tax credits, like the child tax credit, can improve lives from early childhood through retirement. Research also proves tax credits lead to better infant health, improve school test scores for children, boost college enrollment and increase earnings as adults.  Studies show that these benefits may have an even greater immediate impact on the lives of children of color, who experience higher rates of poverty than white children. The benefit impacts long-term outcomes too, as children who receive federal financial benefits work more and earn more as adults.  

With the child tax credit expansion, the credit has not only helped more families but is also estimated to cut overall child poverty by 45 percent — decreasing poverty by 52 percent  for Black children, 45 percent for Latinx children and 61 percent for Indigenous children. Bold changes like this are precisely what we need to create an economy in which everyone can participate and benefit. 

Some opposed to the credit’s expansion or in support of means-testing may wonder: “How can a few extra dollars a month make that much of a difference?” Here’s how: While the benefit does not and cannot replace a job, the expanded child tax credit actually encourages parents and guardians to seek employment and supports working adults to keep their jobs by helping them pay for childcare, gas, car repairs, bus passes and other necessary expenses they need to work. A recent Humanity Forward study found that 94 percent of child tax credit recipients said they would continue to work just as much, or even more, as ripple effects of the payments. 

Despite the promise of the life-changing supports the expanded credit will offer families, some legislators are proposing to include work requirements and means testing in the upcoming reconciliation package. Work requirements and means testing (a determination of whether an individual or family is eligible for government assistance based upon whether they can make do without that help) directly contradict the true intentions of the child tax credit: A policy that works to set up children and families for long-term success so that future generations will be better positioned to attain financial security. 

Not only would these proposed rules create significant administrative burdens, but they would also prevent some of our most vulnerable families from accessing the help they need. America has a long history of enacting policies that are racist and exclusionary by design, and these provisions fall into that category. Subjecting families of color to these draconian rules not only reduces the perceived value of home care and childcare as legitimate work, it would also reduce workforce participation and take away the benefits that the expanded child tax credit has so far had on our entire society including a reduction in food insecurity and a cut in poverty.  

Bottom line: The child tax credit expansion is clearly working. As a part of the federal budget reconciliation process, inclusion of the expanded child tax credit without added burdens would mark a vital step towards racial economic equity.   

As more members of the public begin to recognize systemic racism and demand our leaders address the structural racism that leads to unfair disparities, and with COVID-19 raging on and further destabilizing our poorest households, Congress must protect benefits that help children stay healthy and whole — that means keeping them out of poverty. We must help all families overcome the hardship of these last few years. To do that, we must reject means testing and work requirement, and instead say yes to equity.  

Joanna Ain is associate director of policy at Prosperity Now. Since 1979, Prosperity Now has worked to make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and ultimately, prosperity.