Rashida Tlaib’s End Child Poverty Act Would Dramatically Reduce Poverty
A new analysis shows that the End Child Poverty Act, reintroduced in Congress by Rashida Tlaib earlier this year, would drastically reduce child poverty and poverty in general and lower income inequality. Supporting it should be a no-brainer for Democrats.
A child joins his father as Bronx residents receive food at the St. Helena Pantry on September 28, 2022, in New York City. (Spencer Platt / Getty Images)
In April of this year, the End Child Poverty Act (ECPA) was reintroduced in Congress. The ECPA is a child allowance proposal that would replace the current intricate system of family tax credits with a simple, universal child benefit. The ECPA has the potential to help millions of families and significantly reduce child poverty. However, the ECPA has yet to receive a detailed analysis that estimates its cost and impact. That is, until now. Recently, I collaborated with Max Ghenis, Founder of PolicyEngine, to create an in-depth analysis of the ECPA for 2023. Using PolicyEngine, Max and I were able to determine the program’s cost and effects on household income, poverty, and inequality. This comprehensive evaluation sheds light on the true potential of the ECPA.
Cost
In the analysis, all the components of the ECPA were considered. The ECPA simplifies the existing tax system by abolishing the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). It establishes a credit of $600 for single filers and $1,200 for joint filers, phasing out gradually at $20,000 and $40,000, respectively. The ECPA also includes a $600 credit for adult dependents. When these policies are combined, the net budgetary effect is $111.8 billion in increased tax revenue.
The primary component of the ECPA is the universal child benefit. For 2023, every child from zero to eighteen will receive $5,140 a year ($428 a month). This alone would cost $382.1 billion. Therefore, the overall cost of the ECPA for 2023 is $270.3 billion. While this may seem like a steep cost, it only represents about 1 percent of annual GDP. For context, the United States spends more than 3 percent of its annual GDP on the military. For a relatively modest cost, the ECPA has some astounding distributional effects.
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