The benefits of Biden's child allowance could be worth 8 times its cost, new report finds

[Yo_Mama_Been_Loggin]

As part of his $1.9 trillion American Rescue Plan, President Joe Biden proposed a conversion of the current child tax credit to a fully refundable child allowance. A new study suggests that would generate about $800 billion in benefits to society.

The report - released on Feb. 18 by the Center on Poverty and Social Policy at Columbia University - found that Biden's proposal to create a fully refundable child allowance of $3,600 per child aged 0-5, and $3,000 per child aged 6-17, would cost about $100 billion annually, but with $800 billion in benefits.

"With the exceptions of child protective services, criminal justice services, and parent longevity, there are at least two studies for each impact," the report said. "Together, the impact estimates present a strong and coherent set of results; child allowances are a winning investment in our children's future mobility."

Of the $100 billion spent on the child allowances each year, about 60% would go to families with incomes under $50,000, 22% would go to families making between $50,000 and $100,000, and the remaining funds would be distributed to higher income families, according to the report.

https://www.msn.com/en-us/money/personalfinance/the-benefits-of-bidens-child-allowance-could-be-worth-8-times-its-cost-new-report-finds/ar-BB1dYWWa?ocid=DELLDHP&li=BBnb7Kz

[OneGrassRoot]

1. I'm a little nervous about this...

First, I’m an idiot when it comes to taxes. All I know is that my tax burden greatly increased for 2020 due to GOP changes that eliminated or reduced deductions I have taken for years as a self-employed person. What saved me was being able to claim my grandson. This was the first time I have ever claimed a dependent.

Are they proposing these monthly payments in lieu of claiming children as dependents on tax returns?

Also, Romney’s intention with his support of monthly payments is for that to replace other assistance. I hope Dems won’t entertain that at all because families will be even worse off if they take away SNAP and Medicaid.

[leftstreet]

2. Yes, Romney's plan replaces the Child Tax Credit

But the Biden plan, I don't know.

That's a good question

[OneGrassRoot]

3. I found the answer...

It increases the Child Tax Credit from the current $2000 max deduction to $3600, and instead of using it for tax purposes it will be a monthly payment instead.

It’s a positive step but I think they’re gonna start getting slammed by people just now seeing how much worse their tax situation is due to the GOP tax plan + COVID. Hopefully they can figure something out for that situation too.

[aikoaiko]

4. "conversion of the current child tax credit to a fully refundable child allowance"??

Do I understand correctly that this is in lieu of the $2000 Child Tax Credit?
If so, isn't this only a $1000-$1600 bump?

Or does this mean something different?

[OneGrassRoot]

5. Yes, that's correct.

I had questions myself (posted above) and found more info.

"The proposed overhaul would expand the Child Tax Credit to up to $3,600 for children up to 6 years old, or $3,000 for children up to age 17, compared with its current limit of $2,000 for many families. And instead of claiming the credit when you file your tax returns, as is now the case, the government would provide monthly payouts."

That paragraph is in USA Today, Business Insider and other outlets.

As I mentioned above, a lot of people -- especially the millions of self-employed people who we now know are out there and who have been hit really hard during the pandemic -- rely on that deduction during tax time. I claimed my grandson, first time I have ever claimed anyone, and that's the only thing that saved me from a world of hurt due to the GOP tax changes re: deductions self-employed persons can take.

I was hoping they'd leave the tax benefit in place and the monthly stipend would be on top of that. THAT would help a lot of people, so long as they get to keep the other assistance (food stamps, Medicaid) of course. If they plan to replace a lot of existing assistance with this monthly stipend it won't help that much, I fear.

[aikoaiko]

6. Oy. It sounds like I need to change my withholding.