Today, U.S. Senator Raphael Warnock introduced the American Family Act , which would expand the federal refundable child tax credit (CTC). This bill would enhance the credit so that it would increase benefits and reach more families with children.
The Georgia Budget and Policy Institute supports this legislation as it would support American families by covering some of the cost of raising children and by reducing economic hardship. Specifically, this bill would benefit over 87% of Georgia children, enhancing the existing CTC of $2,000 per child to $4,320 for children under 6 and to $3,600 for children between ages 6 to 17. The legislation also creates a “baby bonus” of $2,360 for newborns, while indexing the value of the CTC in future years to ensure it keeps pace with inflation.
“Poverty is a policy choice,” says Ife Finch Floyd, Director of Economic Justice at GBPI. “We do not have to accept poverty, which disproportionately harms Black and brown children now and in the future. Instead, we can implement a robust child tax credit, which is one of the most direct ways to improve racial equity, family economic security and the long-term well-being of children.”
There is clear evidence that this proposal would significantly reduce poverty. In 2021, a temporary expansion to the CTC’s benefits and reach drove down child poverty across the country, especially for Black, Latinx, and indigenous children. Columbia University’s Center on Poverty and Social Policy estimates that child poverty in Georgia dropped by more than 40% in 2021. Unfortunately, Congress did not make the enhancements permanent, and in 2022, child poverty rose again.
Child tax credits are growing in popularity as an effective way to support families. Sixteen states have created state CTCs. Last week, the Georgia General Assembly passed HB 136 to create a non-refundable credit of up to $250 per child for families with young children and to expand the state’s existing Child and Dependent Care Tax Credit to match 50% of the federal level, which is pending Gov. Kemp’s signature. Non-refundable credits off-set but cannot exceed the amount in income taxes owed to the state.
“The American Family Act would make a generational investment in Georgia families to address the costs of raising children, which causes billions in economic losses each year as families struggle to balance their obligations as parents with the challenges of making ends meet,” said Danny Kanso, Senior Fiscal Analyst at GBPI. “Rather than doubling down on costly policies that deliver outsized benefits to those already at the top of the income ladder, our federal leaders should prioritize working families by strengthening the Child Tax Credit.”
About GBPI: The Georgia Budget and Policy Institute (GBPI) strives to be an anti-racist research and advocacy organization that advances lasting solutions to expand economic opportunity and well-being for all Georgians. We examine the state’s budget, taxes and public policies to provide thoughtful analysis and responsible solutions that address inequities in our state. We educate the public about complex issues confronting Georgia. We activate Georgians to call for policy solutions that put people first. We aim to inspire informed debate and decision-making, advancing our vision of a fair and inclusive Georgia where everyone can prosper.
