Davis Applauds Biden Administration for Moving on Cutting Childhood Poverty
Congressman Danny K. Davis today applauded the work of the Biden Administration, notably, the IRS under Commissioner Charles Rettig for his pledge to implement groundbreaking new provisions in the American Rescue Act to reduce child poverty.
Studies have shown that the U.S.child poverty rate has fluctuated between 15 and 23 percent for the past four decades, 37% of children live in poverty at some point during their childhood. Early childhood poverty has been linked to a host of health-related issues, to toxic stress, to lower IQ scores and reduced academic achievement. Childhood poverty is associated with lifelong hardship and leads to a significant financial burden, not just for the children and families who experience them but also for the rest of society. Children who do not complete high school, for example, are more likely to become teenage parents, to be unemployed, and to be incarcerated, all of which exact heavy human, social and economic costs.
Childhood poverty disproportionately impacts African American, Latinx and Native Americans. Even with the American Rescue Plan’s expansion of the CTC, poverty rates in 2021 are estimated be 9.7 percent for Black children – three times the rate for white children. Without the Rescue Plan, the poverty rate would be 21.5 percent for Black children. These child care subsidies will significantly reduce child poverty and greatly increase parental employment and earnings – especially for Black Americans, single parents, and mothers younger than 25.
It is my goal, and the goal of many of my colleagues in the Congress, especially the Congressional Black Caucus, to reduce child poverty in the U.S. by 50% over the next few years,” said Congressman Davis, “the investment we make in our children today will be repaid many times economically, socially. Most important, it is the right thing, the moral thing, the humane thing to do. The richest nation in the world should not rest until we have eliminated the cruel, persistent plague of childhood poverty.”
In testimony at a Senate hearing on Tuesday, April 13, 2021, IRS Commissioner Charles Rettig said he expects to meet the July 1 deadline in the new pandemic relief law for starting a groundbreaking tax program aimed at reducing child poverty sending much as $300 per month, per child to lower-income families this summer.
The American Rescue Plan temporarily increases the existing child tax credit from a maximum $2,000 a year per child to $3,000 for each child aged 6 to 17 and $3,600 for children under 6. It offers the option for families to receive advance monthly payments, rather than waiting for a lump sum based on the parents’ tax liability.
For the 2021 tax year, the full credit is available to single filers with an adjusted gross income of $75,000 or less; income limits are $150,000 for those married filing jointly and $112,500 for head of household filers
The change will be in effect for a year under the American Rescue Plan however, Democratic lawmakers have made it clear that they want to make it permanent.