🎙️ Voice is AI-generated. Inconsistencies may occur.
Avery is a 3-year-old living in Boston. For months, he has wanted a Spiderman nightlight. But he lives with his grandmother, Beatrice, who makes $7,000 a year as a part-time cashier. As Avery's sole caretaker, Beatrice worries whether she'll have enough money for rent, food, or winter clothes. That's why when she received a $2,400 tax credit from the federal government, she celebrated. She could pay her rent and finally buy Avery's Spiderman nightlight.
Avery and Beatrice's story is not uncommon. As a co-founder of a non-profit program that helps low-income families file taxes, claim refunds, and save money during visits to medical clinics and hospitals, Hole regularly meets families like Avery and Beatrice's. And as a pediatrician and a medical student, we see how families' finances affect children's health. Children experiencing poverty are more likely to have developmental issues, chronic illnesses, and nutritional deficits. They are, for instance, more than twice as likely to be diagnosed with mental health conditions like ADHD and nearly 1.5 times as likely to develop asthma as children not experiencing poverty.
They also have higher odds of facing toxic stress and being food-insecure. Food-insecure children are more likely to experience developmental delays and repeat a grade than their food-secure counterparts. Then there are the long-term effects: Kids born into poverty experience chronic diseases like heart disease and diabetes at higher rates in adulthood. This leads to frequent doctor visits, large medical bills, and lost productivity, costing the United States nearly $4 trillion in direct and indirect annual costs. The evidence is clear: Poverty makes children sick and has individual and societal consequences that can last a lifetime.
Congress has an evidence-based tool at its disposal and one that largely enjoys bipartisan support. When Congress expanded the Child Tax Credit in 2021, monthly childhood poverty dropped by nearly 30 percent, pulling 3.7 million children out of poverty. However, when the Child Tax Credit expired at the end of that year, 3.7 million children were pushed back into poverty, potentially harming their health, learning, and futures. As legislators debate tax policy this fall, they must make reinstating the expanded Child Tax Credit a priority.
When Congress expanded the Child Tax Credit in March 2021, it increased the maximum payment amount, allowed recipients to obtain advance monthly payments, and removed eligibility restrictions that had made the credit inaccessible to families unable to pay income tax. In addition to reducing childhood poverty, the expanded credit helped many families pay for basic needs such as food, housing, and utilities, which are tied to better health. Notably, food insecurity nationwide dropped by nearly 4 percent after the first monthly payment.
These results add to a growing body of evidence that financial assistance for low-income families can improve children's health. For example, the Earned Income Tax Credit, a credit for low-income taxpayers, has been linked with increased birth weights, reduced premature birth rates, lessened maternal stress, and improved K-12 school performance. Other studies show that giving low-income mothers monthly financial assistance correlates to improved infant brain activity.
Unfortunately, Congress let the Child Tax Credit expansion expire, pushing millions back into poverty, causing a spike in food insecurity, and we fear, reversing any health gains. In addition to restoring the progress poor families made, reinstating the expansion would address racial and ethnic health disparities. Children of color are more likely to experience poverty and have adverse health outcomes. The 2021 law reduced child poverty rates by more than 6 percent among Hispanic children and nearly 9 percent among Black children compared to 3 percent among white children. The re-expanded tax credit could therefore help level the playing field for our most vulnerable kids.
The lack of work requirements has been the largest sticking point for opponents of re-expansion. But as some observers have pointed out, the 2021 law, which removed the income eligibility requirement, is unlikely to significantly reduce the rate of work among low-income parents and may have even boosted the incentive to work among certain families, such as those with at least one unemployed parent. Plus, excluding families who earn too little income to pay taxes would harm the most disadvantaged groups and perpetuate health disparities.
What's more, compromises exist. The Brookings Institution, for instance, has proposed an enhanced Child Tax Credit that would provide half of the full credit to families who have no earnings, making it less likely for parents to drop out of the workforce when the expansion is first passed. And there would be a steeper phase-in of the full credit, whereby a family gets an additional $30 per child for each $100 increase in taxable income—double the amount of the current phase-in rate. Parents would therefore have a bolstered incentive to work to earn more credit, mollifying critics who worry about reduced workforce participation. Although children that receive a half-credit might not experience the full benefits the credit offers, it's a better situation than the one we're experiencing currently.
Whatever legislators can agree on, the fact remains that nearly two years have passed since the expanded Child Tax Credit expired, and America's future workforce—our children—are suffering. As clinicians who care for kids, we know that providing financial assistance to vulnerable families like Avery and Beatrice's can substantially improve our patients' health. Doctors' orders to Congress: Restore the expanded Child Tax Credit as soon as possible.
Matt Alexander is a dual MD/Master in Public Policy candidate at Virginia Commonwealth University and Harvard University, where he is a Jerome Grossman Healthcare Policy Fellow.
Michael Hole is a physician and public policy professor at The University of Texas at Austin, where he leads The Impact Factory, a social-entrepreneurship hub.
The views expressed in this article are the writers' own.
