Home Posts Democrats Are Giving Money To Parents But Aren't Sure What To Call It: A Tax Cut Or A Benefit?
Democrats Are Giving Money To Parents But Aren't Sure What To Call It: A Tax Cut Or A Benefit?

Democrats Are Giving Money To Parents But Aren't Sure What To Call It: A Tax Cut Or A Benefit?

Democrats want to make a $300-per-child-month payment to most families a central part of American life; the idea has widespread support in both chambers of Congress, and President Joe Biden called it the "most important among" the remaining parts of his agenda on Tuesday.

All that remains is for them to decide what to call it.

In recent weeks, Democrats have referred to the payments, which formally begin on July 15 as part of the Biden administration's coronavirus relief package, as a tax cut, monthly allowances, child benefits, and an expanded child tax credit. However, as Democrats push to extend the program's lifespan beyond 2020 and persuade families to sign up, Democrats haven't settled on a single label.

Biden usually refers to it as the child tax credit, but freshman Georgia Sen. Jon Ossoff is touring the state this week to promote a “major tax cut for Georgia families.” White House chief of staff Ron Klain, as well as Colorado Sen. Michael Bennet, one of the policy’s architects, have also referred to the payments as a tax cut.

Earlier this month, White House National Economic Council Director Brian Deese called the “child tax credit” “one of the largest-ever single [year] tax cuts” and a “child allowance” in two separate Twitter messages.

The American Rescue Plan's expansion of the #ChildTaxCredit provided one of the largest single-year tax cuts for American middle-class families, and most families in America will begin seeing these benefits in their bank accounts on July 15, 2021. — Brian Deese (@BrianDeeseNEC) June 21, 2021

Child allowances have been shown to improve children's health, education, and future earnings, as well as increase labor force participation and employment rates for single and married mothers. This is pro-middle-class families, pro-health, and pro-work — Brian Deese (@BrianDeeseNEC) June 21, 2021

According to interviews with Democratic strategists, pollsters, and congressional aides, there may be some logic to the nomenclatural madness: appealing to different audiences requires different languages, and there is no single magic word that will make any policy a winner.

The policy is a beefed-up version of the existing child tax credit, with one notable difference: Democrats directed the IRS to send monthly checks of up to $300 per child to parents with children under the age of 17. Parents can receive up to $3,600 per child, distributed monthly through December. (The remaining credit will be distributed with 2021 tax returns.)

Notably, the monthly payments are also available to parents who do not earn enough money to pay taxes, making the program more similar to what many other countries refer to as a child allowance or benefit.

The policy, championed by Bennet and Ohio Sen. Sherrod Brown, has significant anti-poverty implications, and that was the focus of Democrats' initial pitch when they first introduced it.

“All told, the American Rescue Plan would lift 12 million Americans out of poverty and cut child poverty in half,” Biden said after unveiling the plan in late January. “That’s 5 million children lifted out of poverty, and our plan would reduce poverty in the Black community by one-third and in the Hispanic community by nearly 40%.”

Now, the emphasis has shifted slightly. During his speech in Wisconsin on Tuesday, Biden emphasized that the credit would “significantly benefit middle-class and working folks.” And, while the concept of a child tax credit and tax cuts have a long history in American life, ideas such as a “child allowance” or a new entitlement benefit are perceived more radically.

“In a public message, tax credit or tax cut is probably more persuadable,” said one Senate Democratic aide, emphasizing the importance of drawing a comparison with the Trump tax cuts from 2017. “When you look at the distribution of the child tax credit versus the Trump tax cuts, it paints such a perfect picture of what this administration, Senate majority, and House majority is trying to do.”

Democrats also see the “tax cut” messaging as a way to contrast their policies with the tax cuts Republicans passed during Donald Trump’s presidency in 2017, which favored the wealthy and corporations even though they reduced tax bills for the majority of Americans.

In Republican states, calling it a tax cut is an effective strategy for appealing to Republican voters.

Ethan Winter works as an analyst for Data For Progress.

“I think it’s about time there was fairness in the tax code. I don’t want you paying more than your fair share,” Biden said in Wisconsin. “But the tax cut that was passed under Trump, the $2 trillion, not a penny of which was paid for, where did it go? Over 80% of it went to the top one-quarter of one percent.”

Recent polling shows that Americans — across party lines — are more interested in tax cuts than in poverty relief.

According to a May survey conducted by the Navigator Project, a progressive messaging operation led by two prominent Democratic polling firms, referring to the child tax credit as a “tax cut” resulted in increased support and decreased opposition; among Republicans, the proposal went from a net -10 approval rating to a net zero approval rating.

And, because several key Democratic senators, including Ossoff, fellow Georgia Senator Raphael Warnock, West Virginia Senator Joe Manchin, and Arizona Senators Kyrsten Sinema and Mark Kelly, are from Republican-leaning states, the “tax cut” messaging may make sense for them.


“Democrats must use a variety of messaging,” said Ethan Winter, senior analyst at the left-leaning polling group Data For Progress. “In Republican states, calling it a tax cut is an effective strategy when appealing to Republican voters.”

Beyond politics, Democrats must reach out to low-income Americans, particularly those who do not pay income taxes, and persuade them to sign up. According to Data For Progress polling, nearly half of eligible parents had heard little or nothing about the newly expanded child tax credit in early June.

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