Child tax credit payments hit bank accounts, Biden touts it as a ‘middle-class tax cut’
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WASHINGTON (NewsNation Now) — President Joe Biden Thursday marked the first day of newly-increased child tax credit payments, touting it as a “tax cut for the middle class” and pushing for their continuation.
The Child Tax Credit is being likened to a universal basic income for children, though it has income limits. Some 15 million households will now receive full credit. The monthly payments amount to $300 for each child who is 5 and younger and $250 for those between 5 and 17. The payments are set to lapse after a year, but Biden is pushing to extend them through at least 2025.
“This is a middle-class tax cut, it’s just like how the wealthy get tax cuts for a lot of things, it’s a tax cut for having children,” Biden said. “This can make it possible for a hardworking parent to say to their child, ‘Honey we can get new braces now, we can get you a tutor for that math class you are having trouble with.'”
The IRS will send payments out on the 15th of every month through the end of the year. The only exception is August, when they will send the money on the 13th.
The child tax credit was created in 1997 to be a source of relief, yet it also became a driver of economic and racial inequality as only parents who owed the federal government taxes could qualify for its full payment. Academic research in 2020 found that about three-quarters of white and Asian children were eligible for the full credit, but only about half of Black and Hispanic children qualified.
“This would be the largest ever one-year decrease in child poverty in the history of the United States,” Biden said, adding the benefits would be felt for years to come.
Florida Republican Sen. Marco Rubio, who successfully championed increasing the credit in 2017, said that the Democrats’ plans will turn the benefits into an “anti-work welfare check” because almost every family can now qualify for the payment regardless of whether the parents have a job.
“Not only does Biden’s plan abandon incentives for marriage and requirements for work, but it will also destroy the child-support enforcement system as we know it by sending cash payments to single parents without ensuring child-support orders are established,” Rubio said in a statement Wednesday.
An administration official disputed those claims. Treasury Department estimates indicate that 97% of recipients of the tax credit have wages or self-employment income, while the other 3% are grandparents or have health issues. The official, who requested anonymity to discuss internal analyses, noted that the credit starts to phase out at $150,000 for joint filers, so there is no disincentive for the poor to work because a job would just give them more income.
“To the people that say we cannot afford to give the middle-class a break, I say we can afford it,” Biden said in remarks.
This story is developing. Refresh for updates.
The Associated Press and Reuters contributed to this report.
