What a great idea: Creating a state-level child tax credit

 Connecticut Voices For Children

Complete report :"The Case For The Connecticut Child Tax Credit." http://ow.ly/2io050HPuZo

As addressed a recent tax report—“Steps To A Fairer Tax System”—half of Connecticut’s families in 2021 had difficulty paying their usual expenses (e.g., food, housing, utilities).1 The problem has continued in 2022 and appears to be getting worse. In January, 53 percent of the state’s families had difficulty paying their usual expenses, and the percentage was even higher for certain subgroups, especially working-class and lower-middle-class families (78 percent and 62 percent), Black and Latino/a/x families (77 percent and 74 percent), and families with children (65 percent).

Income inequality and the racial income gap make it difficult for working- and middle-class families, especially families of color, to make ends meet; and over time, through both the “investment” and “stress” pathways, income inequality and the racial income gap negatively impact the children from working- and middle-class families, especially families of color, in “virtually every dimension, from physical and mental health, to educational attainment and labor market success, to risky behaviors and delinquency.”

These problems in turn weaken Connecticut’s economy and thereby decrease the state’s ability to make critical investments and pay down long-term obligations, which ultimately hurts all of the state’s families. 

The recent report cited above showed that Connecticut’s approach to taxation contributes to the above problems. The report also showed that making Connecticut’s tax system fairer requires tax reform, transparency, and timely support, all of which, in simple terms, would put more money in the pockets of working and middle-class families, especially families of color.

This companion report provides a detailed overview of one especially problematic component of the tax system: Connecticut is the only high cost of living state in the U.S. with an income tax that does not adjust for family size or child care expenses, which makes the state’s unfair tax system even more unfair for working- and middle-class families with children, especially those that require child care. 

In addition to making it harder for families with children to make ends meet compared to the average family, the lack of tax support for the high and growing cost of raising children directly contributes to the state’s slow economic growth by slowing the state’s population growth, which is a function of both a declining natural rate of population change (i.e., the birth rate minus the death rate) and a negative net migration rate (i.e., the number of families moving to the state minus the number of families leaving).