The eggspensive price of eggs has become the butt of many jokes, but it is no laughing matter. The price of eggs, up three times from last year, is symbolic of the inflation we are experiencing across the board. Hardworking parents across the US are struggling to provide for their families. These post-COVID times, in which we are still reeling from price pressure due to supply chain issues, only adds steam to this strain. Akin to a hurling ball of fire usually reserved for action movies, this monstrous strain has been exacerbated by a sudden recoil of stimulus funds because of the end of the American Rescue Plan Act (ARPA). Far from fictional, this strain plays a very real role in the daily lives of families by spurring poverty.
As the Connecticut Coalition of Volunteer Income Tax Assistance (VITA) tax preparers, we are seeing this impact firsthand. Our clients are in shock when they hear how little of a refund they will receive this year. “That’s it? This can’t be right?” is the constant refrain. Many of our clients are receiving $3,000-$7,000 less this year due to the expiry of the Child Tax Credit and other benefits. This translates into an inability to afford groceries, rent, and the needs of their children. Tax returns form a critical foundation of wealth creation for these families.
When we say wealth creation, we mean a holistic well-being for families. The 2021 expansion of the Child Tax Credit (CTC) led to a historic reduction in poverty, particularly for children. Child poverty fell to its lowest level on record (5.2%), according to the US Census Bureau, on an annual basis (Brookings Institution Report). It is no secret that cash in hand has a linear relationship to mental, physical, and emotional well-being. So much so that the hospitals (specifically pediatricians) were empathetically prescribing their patients to file for Earned Income and Child Tax Credit payments. Our teams worked hard to deliver these benefits to families, but they are no longer available.
The Child Tax Credit works, resoundingly so.
Connecticut has an opportunity to translate these learnings into action. While proposed increases in the Earned Income Tax Credit (EITC) are a step in the right direction, we need legislative tools that have a unique singular focus on the needs of children. A permanent, refundable, state-level CTC at $ 600 per child would support more than 600,000 children, including about 80,000 children living in poverty. This cash would further bolster the Connecticut economy creating a benefit to all residents.
The learnings cannot be clearer. We must enact a permanent, refundable CT Child Tax Credit and enhance the CT Earned Income Tax Credit as proposed in Sections 3 & 4 of HB 5673, SB 771, and SB 772.
