A Child Allowance Could Be Worth Eight Times the Costs
February 23, 2021
With the growing support for a child allowance on both sides of the aisle, the Center on Poverty and Social Policy at Columbia University has published a new research brief estimating the full costs and benefits of President Biden’s proposed Child Tax Credit expansion. The topline finding: the benefits created by a child allowance could be worth eight times the annual program cost.
The team centered their analysis on the Biden proposal to expand the Child Tax Credit (CTC) as part of the forthcoming Covid-19 relief package. The reforms would increase the CTC to $3,600 for children aged 0 to 5, and $3,000 for those aged 6 to 17. Payments would be issued monthly or quarterly depending on the IRS’s capabilities, and by being fully-refundable, any phase-in or minimum income requirements to qualify would be eliminated. The proposal mirrors the American Family Act, legislation that the Niskanen Center has previously analyzed here.
