Want to Help Kids Using Tax Code? Don’t Exclude Working Poor Families

The New York Times’ latest “Room for Debate” feature asks whether people without children should subsidize tax breaks for the costs that parents bear.

In my contribution, I explain that doing more to help struggling parents can help their children both now and in adulthood.  I also explain that a bill sponsored by Senator Mike Lee (R-UT), which purports to help children, actually would exclude children in many working-poor families:

The bill’s new Child Tax Credit wouldn’t help many working-poor or near-poor parents because they’d only receive it if their combined income and payroll taxes exceeded their existing Earned Income Tax Credit.

Worse, Lee’s plan would let three tax provisions that now help more than 25 million children expire at the end of 2017. These provisions increase the earned income credit for families raising three or more children, expand marriage penalty relief, and improve the Child Tax Credit so it reaches more low-income working families and expands for many others.

In 2018, under the Lee plan, a mother with two kids working full time at the minimum wage (earning $14,500) would lose about $1,725: she’d no longer qualify for the existing Child Tax Credit, and she’d earn too little to qualify for Lee’s new credit.

Policymakers should make these provisions permanent.  In addition, policymakers who want to use the tax code to help children should realize, I explain, that they can help children by also helping “childless workers,” the sole group that the federal tax system taxes into poverty.

The Urban Institute and the Tax Policy Center’s Elaine Maag makes a similar point.  You can read Elaine’s and the other contributors’ pieces here, and click here to read my full column.