Benefits of Expanding Child Tax Credit Outweigh Small Employment Effects

The American Rescue Plan will temporarily increase the Child Tax Credit and make the full Child Tax Credit available to all children except those in families with the highest incomes. This proposal would markedly reduce the number of children in families with incomes below the poverty line while narrowing the gap in poverty rates between white children and Black and Latino children. Some have raised concerns that proposals to expand the Child Tax Credit and make the full credit available to all children in families with low income, including those in which a parent is out of work, will discourage work. This article, from the Center on Budget and Policy Priorities, makes the case that the strong benefits of the proposal far outweigh any potential reduction in employment.