Debate Desk
Is an Expanded Child Tax Credit Just Welfare, and Why Are Conservatives Divided?
Conservatives split over whether a larger credit supports families and work or becomes a no-work benefit; design details such as work requirements decide it.
The claim
Supporters say a larger credit helps families with the cost of children and is pro-family and pro-life in effect. Critics from the right call a fully refundable monthly credit with no work requirement a welfare program that weakens the link between work and reward.
The answer in three points
- The credit is a tax cut for families, and it grew under Republican leadership. The Tax Cuts and Jobs Act of 2017 doubled it to $2,000 per child. Conservatives have long argued that the tax code should recognize the cost of raising children, who are the nation's future workers and taxpayers.
- The dispute concerns design. In 2021, the American Rescue Plan temporarily increased the credit to as much as $3,600 per child, made it fully refundable and paid it monthly. Some conservatives objected that this removed the work requirement that had been part of the credit and resembled an unconditional benefit.
- There is a middle way. A credit that is tied to earnings, as the earned income tax credit is, rewards work and supports parents. Others favor a larger credit for all parents, on the ground that raising children is itself work of social value. Voters and legislators can weigh these.
A family-friendly tax code and a strong work ethic can go together.
The numbers
- The Tax Cuts and Jobs Act of 2017 raised the child tax credit from $1,000 to $2,000 per child, according to the Internal Revenue Service.
- The American Rescue Plan Act of 2021 raised the credit for 2021 to $3,000 per child ages 6 to 17 and $3,600 for children under 6, paid in part in monthly installments, according to the Internal Revenue Service.
- The Welfare reform law of 1996 tied cash assistance to work requirements, and caseloads fell by more than half in the following years, according to the Department of Health and Human Services.
What they will say next
"Work requirements punish poor children." A credit that depends on work can leave out the poorest families. Supporters say that work is the best route out of poverty, and critics say children should not pay for their parents' situation.
"The monthly payments reduced child poverty." They did in 2021, according to the Census Bureau's measure, and poverty rose again when the payments ended. The question is whether the effects last and what they cost.
"The credit encourages births." The evidence on that is limited, and families make decisions for many reasons.
"It is too expensive." It would add to deficits unless paid for, which is a reason to pair it with spending reductions.
Reasonable conservatives can disagree about how best to help families, and they agree that families deserve help.
"Large families deserve more help." Many conservatives agree, and proposals to increase the credit per child reflect that. The disagreement is over the way it is delivered and conditioned, and over the cost.