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A Back-to-School Focus on Helping Kids Thrive

The start of a new school year is an appropriate time to highlight important legislation before Congress that would help give all children a chance to reach their potential.

The first few years of life are critical to brain development; growing up in poverty, with its corresponding stress, undermines brain development in young children. But we know that additional income for poor families can mitigate this harm and improve school performance.

Various bills introduced in the Senate and House — including the Working Families Tax Relief Act, sponsored in the Senate by Sherrod Brown, Michael Bennet, Richard Durbin, and Ron Wyden and in the House by Dan Kildee and Dwight Evans — would expand two policy success stories for low- and moderate-income families: the Earned Income Tax Credit (EITC) and the Child Tax Credit. Some 49 million children would benefit under the Working Families Tax Relief Act. So would over 3 million teachers and child care workers, many of whom are paid too little (see table for state-by-state figures).

The legislation would boost the EITC for families with children by roughly 25 percent and make the Child Tax Credit fully refundable so children in lower-income households, including those with little or no income, could benefit fully from it. Today, the Child Tax Credit provides little or no help to millions of children and families with low incomes — the people who need it most.

The bill would also create a larger, fully refundable Young Child Tax Credit for children under age 6, boosting the credit to $3,000 per young child, up from today’s $2,000.

Consider, for example, a single mother with a ten-month-old daughter and 3-year-old son who works part-time in a fast-food restaurant earning $10 an hour, or $15,000 a year. The bill would boost her income by $5,580 at a crucial stage in her children’s lives.

Taking its EITC and Child Tax Credit expansions together, we estimate that the bill would boost the incomes of roughly 25 million families with children, including 13 million white families, 5 million Latino families, 4 million Black families, and 1 million Asian American families. It would lift 3 million children out of poverty and lessen poverty for 8 million other children. The child poverty rate would drop by more than a quarter, from 15 percent to 11 percent, using the Supplemental Poverty Measure (which most analysts view as more accurate than the official poverty measure and which counts refundable tax credits as income). And deep poverty among children — the share living below half of the poverty line — would fall by 40 percent.

A National Academy of Sciences (NAS) committee that Congress charged with recommending ways to reduce child poverty recently included similar proposals — an EITC expansion and “child allowance” (which could take the form of a refundable Child Tax Credit) — in one of its policy packages. “[T]he weight of the causal evidence,” the committee concluded, “indicates that income poverty itself causes negative child outcomes, especially when it begins in early childhood and/or persists throughout a large share of a child’s life. Many programs that alleviate poverty … have been shown to improve child well-being.” The better outcomes linked with stronger income assistance include healthier birth weights, lower maternal stress, better childhood nutrition, higher school enrollment, higher reading and math test scores, higher high school graduation rates, less drug and alcohol use, more positive behavior, and higher rates of college entry, the NAS committee noted.

The Working Families Tax Relief Act would also boost the incomes of many child-care providers, teaching aides, and teachers. For example, consider a seventh-grade science teacher making $45,000 whose spouse cares full time for their two children, ages 2 and 7. Their EITC would rise by about $1,460 and they would receive an additional $1,000 from the Young Child Tax Credit, for a total gain of about $2,460.

Or consider a young child-care provider who works 30 hours a week for $11 an hour, earning about $17,200. The bill would substantially expand the tiny EITC for working people not raising children in their homes, raising her income by $1,180.

Children, and Teachers and Child Care Workers, Who Would Benefit From Working Families Tax Relief Act, by State
State Number of Children Number of Teachers and Child Care Workers
Total U.S. 49,335,000 3,274,200
Alabama 787,000 45,800
Alaska 123,000 8,100
Arizona 1,164,000 65,600
Arkansas 523,000 36,200
California 6,079,000 342,200
Colorado 781,000 55,000
Connecticut 414,000 37,600
Delaware 132,000 8,600
Dist. of Columbia 81,000 6,000
Florida 2,943,000 179,000
Georgia 1,749,000 109,900
Hawaii 206,000 12,100
Idaho 303,000 17,200
Illinois 1,885,000 130,700
Indiana 1,085,000 68,700
Iowa 472,000 39,000
Kansas 476,000 35,200
Kentucky 725,000 47,300
Louisiana 815,000 45,800
Maine 164,000 15,300
Maryland 809,000 59,100
Massachusetts 770,000 69,500
Michigan 1,475,000 92,700
Minnesota 784,000 59,500
Mississippi 549,000 34,300
Missouri 952,000 67,800
Montana 154,000 11,500
Nebraska 317,000 22,700
Nevada 475,000 19,400
New Hampshire 142,000 14,200
New Jersey 1,137,000 95,000
New Mexico 368,000 25,400
New York 2,741,000 237,800
North Carolina 1,592,000 105,600
North Dakota 113,000 8,400
Ohio 1,767,000 111,900
Oklahoma 697,000 43,200
Oregon 571,000 43,600
Pennsylvania 1,729,000 125,100
Rhode Island 133,000 10,900
South Carolina 785,000 50,100
South Dakota 140,000 10,400
Tennessee 1,066,000 69,400
Texas 5,097,000 293,200
Utah 616,000 38,500
Vermont 75,000 7,500
Virginia 1,145,000 87,200
Washington 1,045,000 72,300
West Virginia 276,000 16,700
Wisconsin 819,000 59,400
Wyoming 92,000 6,800

Source: CBPP estimates based on 2015-2017 American Community Survey data and March 2018 Current Population Survey data.