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Permanently Expanded Child Tax Credit Would Offer Huge Return On Investment – NBER

A working paper released by the National Bureau of Economic Research (NBER) this month indicates making the expanded child tax credit permanent would yield benefits several times greater than the investment required.

As part of the American Rescue Plan, a covid-19 relief bill enacted in early 2021, eligible families received monthly payments of up to $300 per child between July and December.

Households can also claim the CTC money relating to the other half of 2021 when they file their federal tax returns, but the expiration of the plan at the end of December means that there will be no more monthly payments after this date.

Authored by Irwin Garfinkel, Laurel Sariscsany, Elizabeth Ananat, Sophie M. Collyer, Robert Paul Hartley, Buyi Wang and Christopher Wimer, the NBER working paper titled “The Benefits and Costs of a US Child Allowance” revealed that a permanently expanded CTC would bring ten times more to the US economy.

“Our estimates indicate that making this expansion permanent would cost $97 billion per year and generate social benefits with a net present value of $982 billion per year“, said the authors.

Recent research from the Columbia University Center on Poverty and Social Policy indicated that 3.4 million children have been pushed into poverty since the end of the enhanced CTC.

See also: End of child tax credit expansion affects millions of American children

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