New Analysis: Senate Child Tax Credit Proposal Stacks the Deck Against Rural Working Families

November 29, 2017 by

James Myall

New analysis by MECEP shows that the proposal by US Senate Republicans to increase the size of the Child Tax Credit (CTC) will do little for the majority of children in Maine’s most rural and poorest counties while delivering significant benefits to wealthy families who live primarily in more urban and suburban areas. This analysis builds on last week’s analysis from the Center on Budget and Policy Priorities which showed that 38% of children in Maine’s working families – 85,000 kids – would not see the full benefit of what is being touted as a “doubling” of the CTC. The new data demonstrate that Maine’s rural children – who are among the state’s poorest – are most likely to be left out by the Senate plan.

The Senate CTC plan also would leave behind many people with disabilities in Maine.

About 10,000 households with children in Maine include a household member with a disability and are in an income range that makes them unlikely to get the full Senate CTC. People with disabilities could be found in at least 1 in 4 such low-income working households likely to be denied the full CTC.

As previously noted, the Senate proposal, which on paper increases the maximum CTC from $1,000 per child to $2,000 per child, overlooks tens of thousands of Maine kids due to a combination of existing and proposed rules that reduce the value of the CTC for the low-income families. These families are disproportionately concentrated in Maine’s rural counties. A majority of children in working families in Piscataquis and Washington Counties won’t see the full benefit of the proposed increase; nor will more than 40% of children in Androscoggin, Aroostook, Franklin, Hancock, Knox, Lincoln, Oxford, Penobscot, Somerset, and Waldo Counties. A child tax credit that truly rewards work and promotes economic opportunity for those who need it most would put the children in these working families at the head of the line to receive the maximum credit, not at the back of the line to receive the bare minimum.

These findings come on top of the news that the Senate’s plan to repeal the Affordable Care Act’s individual mandate would disproportionately hurt residents of Northern and Down East Maine; and skewed towards the wealthy over working and middle-class Mainers.

By many measures, the Republican tax proposal proves to put Maine families last. Recent analysis found that the total federal tax bill paid by Mainers would actually increase by $90 million by 2027. Even with changes intended to offset some of the adverse consequences of the individual mandate repeal and the deductibility of state and local taxes, Mainers can still expect to pay higher health insurance premiums and more in taxes by 2027 in order to pay for tax cuts that primarily benefit wealthy foreign investors, profitable corporations, and the top 1%.

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