The current federal Child Tax Credit provides up to $2,000 per child per year to qualifying children, but low-income families lose out because they do not have enough earnings to qualify for the full benefit. This brief documents who is currently “left behind” in terms of realizing the full benefits of the federal Child Tax Credit because of the CTC’s earnings requirement, finding that those left out are disproportionately children of color, those in families with young children, those with single parents, and those who reside in rural areas. Adopting a more equitable, fully-refundable Child Tax Credit that is not tied to earnings would effectively remedy these inequities and meaningfully increase the after-tax incomes of those who are currently left behind.
One in five New Yorkers lives below the poverty line— a statistic that underscores the local interest in the poverty implications of policy proposals arising from the 2020 presidential campaign season getting underway. In recent months, Democratic contenders have put forward a variety of policy proposals that aim to reduce poverty across the country. In this brief, we focus specifically on New York City and report on the potential anti-poverty impacts of some of the most prominent tax credit proposals. We analyze two renter’s credit proposals: the Rent Relief Act (RRA) and the Housing, Opportunity, Mobility, and Equity Act (HOME); two EITC reforms: the Grow American Incomes Now (GAIN) and Livable Incomes for Families Today (LIFT); and the American Family Act (AFA). These proposals have the potential to reduce poverty in New York City by 10 to 38 percent, and deep poverty by 10 to 27 percent.
Expanding the Child Tax Credit (CTC) at the state level could lift millions of children out of poverty and help families who benefited little or not at all from the 2017 federal expansion of the CTC, according to a 50-state report released today by the Institute on Taxation and Economic Policy and the Center on Poverty and Social Policy at Columbia University.
The report,The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis, outlines two bold options for creating state-level CTCs. The first would reduce child poverty by at least 15 percent in all but four states. The second, more ambitious option would reduce child poverty by at least 25 percent in all states and up to 45 percent in more than half of states.
A proposed rule change to the food stamp (SNAP) program would alter the way in which states can exempt local areas from federal work requirements by restricting waivers to those areas with a local unemployment rate of 7 percent or higher. But, as our latest research brief demonstrates, the labor market conditions faced by those most likely to be subject to work requirements are substantially worse than the 7-percent floor. The local employment prospects for those potentially affected by this new rule vary widely among subgroups at higher risk, including women, non-white individuals, and those with a high-school education or less. Many of those affected may be unable to find adequate work to meet the rule's new work requirements.
Earlier this year, Robin Hood added a series of questions about New Yorkers' perceptions of opportunity and fairness to the Poverty Tracker. The results, highlighted in the latest Poverty Tracker report, are striking. Most New Yorkers view the economy as unfair and opportunity as limited, but they are also optimistic about the future, and optimism is highest among those in the most difficult circumstances. These results provide new details and perspectives that will help to inform fight against poverty in New York City.
The American Family Act's (AFA) proposed reforms to the Child Tax Credit (CTC) present an opportunity to transform the credit into one that works for all children, not just those whose parents earn enough to qualify. We find that the AFA would move 4 million children out of poverty and cut deep poverty among children in half. If the CTC’s credit values were to increase, as they do in the AFA, but with the credit still tied to earnings, this impact would be greatly reduced, and children with the fewest resources would again be left out. Even a less generous hike in the credit value alongside the elimination of the earnings requirement would do more to reduce child poverty than a more generous credit tied to earnings.
Reducing poverty and inequality is developing into a central issue in the conversation around the 2020 presidential election. This brief contributes to this conversation by simulating the potential impacts of various policy proposals put forward by 2020 candidates, including estimated costs, anti-poverty effects, and distributional implications of proposed plans. All of the proposals that we simulate here involve new or expanded benefits administered through the tax system. We find that each of the five proposals makes a considerable dent in the poverty rate, though impacts vary across different populations and by the estimated costs and targeting of each proposal.
According to the Congressional Budget Office, the distribution of wealth in the United States has grown increasingly unequal over the past half-century, especially along racial lines. Lawmakers and researchers have proposed to address the issue by introducing universal “baby bonds,” paid to each newborn in the United States and preserved until the individual reaches young adulthood. By tying bond values to net worth rather than to income, the proposed scheme intends to better address the extremely persistent racial disparities in net wealth.
A new study by Naomi Zewde, a postdoctoral research scientist at the Center on Poverty and Social Policy, finds that the policy would considerably narrow wealth inequalities by race while simultaneously improving the net-asset position of all young adults and alleviating the increasing concentration of wealth at the top.
For many low-income households, losing Medicaid coverage means entering poverty. The current administration has called on states to impose work requirements on Medicaid beneficiaries. Last year, three states began requiring documentation of employment for Medicaid eligibility and seven more states have similar proposals pending. The impact of such legislation goes beyond the often critically important loss of healthcare. Loss of Medicaid means an increase in medical-out-of-pocket spending, and those families subject to increased medical costs are vulnerable to falling into poverty. In our latest brief, we simulate the impact of work requirements on medical expenses and poverty. We find that close to 3 million individuals would lose coverage, annual medical expenses could rise by over $1,000 per family losing coverage, and over 130,000 Americans would enter poverty if work requirements were imposed on Medicaid recipients.
Costs of living vary tremendously across the US. Yet, historically, our measurement of poverty and our major antipoverty programs have not accounted for this variation. The Supplemental Poverty Measure (SPM) considers a variety of important factors that the official measure does not, including geographic variation in costs of living. This translates into different poverty thresholds for different regions. These geographic variations in the SPM poverty line have a substantial effect on the estimated antipoverty impacts of government programs. In our latest brief, we find that the main reason antipoverty programs seem to make less of a difference in high-cost areas is simply that the costs in those areas are greater. It takes more to make ends meet in high-cost areas, but government benefits do not generally reflect this fact. Ultimately, our analyses show that costs of living are critical to the accurate assessment of state-level poverty rates and the true impact of antipoverty programs.
On Sept. 22, 2018, the Department of Homeland Security proposed changes to “public charge” policies that govern applications for legal permanent resident status. The changes would penalize applicants who receive public benefits including parts of Medicaid, the Supplemental Nutrition Assistance Program (SNAP), housing assistance, and other public benefits. The implications for poverty in New York City are stark. Our latest brief demonstrates that these policy changes would push between 65,000 and 115,000 New Yorkers into poverty, including as many as 45,000 children.The report also explores the so called “chilling effect” of the policy, where people drop out of public programs even if they are not directly affected because of misinformation or fear. With those chilling effects, the report estimates the public charge rule changes could negatively affect the income of 400,000 to 700,000 people in New York City.
The CPSP has released a data table featuring the poverty rates from 1967 to 2017 measured under the Supplemental Poverty Measure (SPM). The data table includes the historical SPM poverty rates and SPM poverty rates anchored to the 2012 SPM poverty thresholds with and without taxes and transfers. Results are calculated at the population level, as well as for children, working-age adults, and the elderly. This data table allows researchers to determine poverty rates in a given year without needing to download the historical SPM public-use data files.
Learn more about the historical SPM data files here.
New York City has one of the largest Lesbian, Gay, Bisexual, and Transgender (LGBT) populations in the country. Our latest report uses the Poverty Tracker data to look more closely at how LGB-identified New Yorkers are faring with respect to a number of measures of wellbeing such as health, poverty, and hardship. The report features the first published estimates material hardship among the LBG-identified population in New York City. Access the report to learn more.
With the Supplemental Nutrition Assistance Program (SNAP / food stamps) up for renewal, its critics are rallying behind efforts to expand SNAP work requirements to all recipients that they consider to be “work capable.” These critics argue that “work-capable” adults are increasingly taking up SNAP benefits while working less. But are these claims valid? In light of the far-reaching impacts that changes to work requirements would have, our latest research brief provides new empirical evidence regarding benefit take up and work effort of “work-capable” adults. We find that “work-capable” adults do not represent a growing segment of the SNAP caseload and a majority of “work-capable” adults who receive SNAP are working during the year that they receive benefits. Our results reinforce a body of research indicating that families receive SNAP in times of distress and unemployment, or times for which the safety net was designed. Access our brief to learn more.
The Child Tax Credit (CTC) is the closest policy that the U.S. currently has to a universal benefit for families with children, but under the current structure of the credit, many low-income families are left out. The uneven distribution of the CTC provides an opportunity for states to correct the imbalance and ensure that low- and moderate-income families benefit equally from the credit as compared to their higher-income peers. In our latest Poverty & Social Policy Brief, we simulate the costs and benefits of such a correction in the state of California, the state with the highest rate of child poverty. We find that correcting the inequalities in the CTC would yield meaningful reductions in child poverty in California.