In the course of explaining why the GOP tax plan is so disappointing (even if you already expected to dislike it) Dylan Matthews followed something I was already disappointed about, with something that I don’t know whether (or how much) I should be disappointed about:
Sens. Marco Rubio (R-FL) and Mike Lee (R-UT), and then Ivanka Trump, pushed to double the child tax credit to $2,000 per person. That on its own isn’t too exciting; the tax plan already eliminates p’ersonal exemptions, so you have to increase the child tax credit significantly just to compensate for that.
But what was exciting was Rubio and Lee’s proposal to lower the refundability threshold to $0. That sounds like a technical change, but it means that a single mom earning $8,000 a year while working part time and raising her two children would get $1,224, rather than the $750 she’d get under current law. That’s a big raise, one that could make poor families’ lives significantly better.
That proposal didn’t make it in. Instead, the main change to the child tax credit for poor families is a provision barring US citizen kids with unauthorized immigrant parents from claiming it.
It’s about $4 billion to go toward some tax cuts. More importantly, Republicans don’t like paying for welfare programs and don’t want the welfare state to incentivize illegal immigration. I think the second consideration is perfectly reasonable.
If taxpayers have to finance welfare benefits for immigrants, eventually they’ll vote for fewer immigrants. If they’re on the hook for unauthorized immigrants, eventually they’ll vote for a crackdown. But immigration from lower- to higher-income countries is such an unmitigated humanitarian good, you don’t want to choke it off. That’s why it’s a sound idea to make the welfare state “migration robust” by limiting immigrant eligibility for public benefits.
The IRS allows unauthorized parents, who generally can’t get a Social Security card, to collect the CTC with an ITN. Republicans have complained about this for years. I think the provision in the GOP tax bill is mandating an SSN to collect. I’m not in principle against this. But is it really a good idea to keep the credit from undocumented parents?
If you see the CTC as a subsidy to parents for having kids, it makes sense to want exclude them on either civic nationalist or “migration robustness” grounds. But if you see it as a transfer to the kid mediated by the parent, you get a different picture.
The CTC really helps kids. Taking it away is likely to leave current recipients slightly less nourished and a bit more stressed, which will hurt academic achievement, future productivity, and increase the odds of crime. We ought to weigh this loss against the gain from marginally increasing the migration robustness of the welfare state. I suspect it cuts in the direction of maintaining eligibility, but I can’t be sure.
With American kids of undocumented parents, the kid is inside the charmed circle. If the transfer is directed at the kid, then U.S. kids ought to get it. It seems very unlikely to me that CTC eligibility adds to the incentive of unauthorized immigration already created by birthright citizenship. Stripping eligibility for this class of American kids just senselessly makes them, and everybody else, worse off.
A tiny amendment making an ITN, plus a photocopy of the kid’s American birth certificate, okay for eligibility would be a good idea.