Minnesota Catholic Conference
What families are facing:
The cost of living and raising children in America has skyrocketed. The economic burdens of parenthood are pushing existing families to the brink.
Minnesota families, that is to say parents raising minor children, are looking for fiscal relief but not in the form one one-time measures. They want and need something that they can rely on and factor into their budgets, at least for the next several years. At the same time, families don’t have much appetite for a tax rate cut that, while ongoing, would only add a few more dollars in each of their paycheck.
Data points:
A 2022 Brookings Institution analysis, commissioned by the Wall Street Journal, estimated that it will cost a married, middle-income couple who have two children $310,605- or $18,271 per year- to raise a child born in 2015 through age 17 . This is an increase of more than nine percent from the amount reported two years earlier.
In March of 2002, Bloomberg Economics reported that U.S. families are facing a $5200 bill due to inflation.
According to the most recent Consumer Price Index the cost of energy in our area was up over 40.8 percent, and food prices were up nearly 13.5 percent. Overall, consumer prices are up 8.2 percent over the past 12 months.
A Solution:
Direct child allowances, money sent to parents, are arguably the single-most impactful policy for preventing child poverty and all of its long-term problems. Direct child allowances benefit the very young in similar way that Social Security benefits the elderly. The 2021 expanded Federal Child Tax Credit gave us a great case study. It provided evidence of the positive impacts that a broad-based, flexible child tax benefit can have on family wellbeing. Minnesota has an opportunity to build on the success of the expired federal credit by child tax credit of our own.
A Minnesota child tax credit of $1800 (roughly half of the 2021 expanded federal credit) per child would provide $3600 in annual economic provision for both single and two parent households with two children.
The parents we have spoken with point to the impact that the 2021 American Rescue Plan’s one-year federal Child Tax Credit (CTC) expansion had on their wellbeing. The anecdotal impact on families was also backed by data and empirical evidence. In December 2021, when most families had received half of their child tax credit through advance monthly payments, an estimated 3.7 million American children had been elevated out of poverty (using a monthly poverty measure), a 29 percent reduction that was reversed the following month after the monthly payments expired.
Only 9 other states have enacted a state-level child tax credit. This overview from the National Conference of State Legislatures provides comparison details of what those other states are currently doing: https://www.ncsl.org/research/human-services/child-tax-credit-overview.aspx
A child tax credit would provide targeted relief to the Minnesotan’s who need it the most because parents raising minor children are bearing the brunt of the economic strain caused by the skyrocketing costs of food, energy (gas), and basic consumer goods
Not convinced?:
This website, hosted by the Niskanen Center's Child Tax Credit Working Group, makes a compelling case for child tax credits and will help you get conversant about the issue: https://www.expandthechildtaxcredit.com/
This article from scholar Patrick Brown makes the case that per-child tax benefits are the best mechanism to recognize the socially beneficial work that parents provide.
Concerned about how some parents will use the funds? Read these articles:
"Here’s What Families Are Actually Using the Child Tax Credit to Pay For" - Bloomberg
"Joe Manchin's claim that the child tax credit will be used on drugs is misguided"
Do you agree that a Child Tax Credit would benefit families in Minnesota? Here's the status of this proposal and what you can do to help bring it into law:
Status: This policy proposal needs a legislative champion!
Take Action: Connect with your State Senator and State Representative to ask them to introduce this policy as a bill in the legislative session. You can get the tools you need to schedule meetings with your legislators and make your pitch on the Take Action page.
Meeting with your legislator? Bring these materials:
MCC's Child Tax Credit One pager:
Click the button to download a copy of the bill. You can give this bill to your legislators to discuss it with them:
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