Politico’s Brian Faler recently reported on how Republicans and Democrats might be able to find common ground next year on expanding the child tax credit. Doing so would be a step in the right direction. Advancing the welfare of young children should be something that appeals to every political lean.
Our tax code has a long history of incentivizing important social priorities, including college education, homeownership and saving for retirement. Very few of our tax incentives, however, are aimed at improving chances for one of our most vulnerable populations – low-income children under the age of five.
Expanding the credit for children under five recognizes the need to address the rapidly escalating costs of quality child care. Earlier this year, New America, Care.com, Child Care Aware and A.T. Kearney collaborated in producing The Care Index, which examines cost, quality, and availability data on child care across the country. The average cost of center-based infant care is 12% higher than for older children, and exceeds the cost of in-state college tuition and fees in 33 states. Nationally, the cost of full-time care in child care centers is 85% of the monthly U.S. median cost of rent.
Children from low-income families lack resources for school readiness, and as a result, they start school behind their more affluent peers. Making the child tax credit refundable will put cash back into the hands of low-income families, allowing those with significant need to benefit.
Research shows that early education for low-income children results in better education, health and economic well-being when they’re adults. Bringing parity to the tax code by addressing this need is not just good politics – it’s good policy.