President Biden’s American Rescue Plan expands the Child Tax Credit to as much as $3,600 per child for 2021. Sen. Mitt Romney (R-Utah) offered an alternative that went further, proposing a permanent monthly cash allowance — rather than a tax credit — of up to $350 for each child.
Both proposals represent significant improvements over current efforts to support Americans living in poverty, depositing cash each month into the bank accounts of families in need. But both proposals ignore a troubling history of racism at their peril.
In 1978, Shelley Miller, a Black married father of three, was indicted for welfare fraud. His case received media attention because he “was indicted for illegally collecting aid while he was employed as a community service worker for the Chicago Department of Human Services.” Convinced that rampant fraud existed among Black welfare recipients, prosecutors found it. It seems unlikely that they pursued such fraud claims as vigorously a generation before when “the federal government discriminated against Black citizens as it created and administered the sweeping social programs that provided the vital framework for a vibrant and secure American middle class.”
Both the open racism of the 1930s and 1940s and the racially disparate enforcement that followed may seem safely in our past. But the ugly failures of today’s child welfare system suggests otherwise. The pandemic has laid bare the racialized, multigenerational inequality produced by decades of disastrous anti-poverty policies. Worsening childhood poverty in the U.S., where 11 million children lack enough food to eat, disproportionately affects Black families.
Why? Because political leaders in the 1980s and 90s, chief among them former President Ronald Reagan, embraced racist stereotypes like the so-called “welfare queens,” who supposedly lived large on government largesse, to oppose direct cash aid.
After decades of criticism, the Clinton administration’s welfare reforms drastically cut direct aid to needy families. Federal spending on cash aid to families has fallen 82% since then, and the benefits are so meager that families are still left below the poverty line and usually unable to afford basic housing. After 1996, most aid to families living in poverty has come in the form of tax credits.
Unfortunately, using tax law to deliver welfare benefits hurts those most at risk. The IRS simply was not designed to identify those in need. Ordinarily, families must wait until after the end of a year to claim a credit. Recognizing that families in need may not be able to wait that long, the Senate bill calls on the IRS to “establish” a new advance payment program. We don’t yet know what that program will look like, but when charged with making the 2020 economic impact payments, the IRS first decided to pay them to incarcerated individuals before attempting to claw them back. The courts later determined that the IRS had acted capriciously and without authority.
It would be reassuring to think that in 2021 Biden’s plan — which unlike Romney’s was carefully designed not to resemble what was once known as welfare — will not create a rush to prosecute countless new Shelley Millers. But the shift away from traditional welfare and toward tax credits has not ended the practice of racially discriminatory enforcement. A simple look at the 10 most-audited counties reveals they are impoverished and overwhelmingly Black and Latinx.
Should we worry about prosecution, with devastating and racially disparate consequences? It’s hard not to when the government has spent billions of dollars pursuing welfare “fraud” often committed unknowingly or out of desperation. The Democratic proposal acknowledges this threat by promising to forgive, rather than prosecute. But such promises are not enough.
The IRS has just begun to open its eyes to race. The silver lining of the pandemic lies in the opportunity it provides to rethink the kind of society we want to live in. Until now, poverty had long been framed as an individual moral failing rather than largely arising from structural economic and political factors.
The expansion of the Child Tax Credit acknowledges that children represent a societal good, and that everyone benefits by supporting future workers and voters. Shortchanging children of color by continuing a longstanding pattern of racially disparate tax enforcement would be penny-wise and pound-foolish, costing taxpayers dearly in the long run, in homelessness, mental illness and unemployment.
Pandemic relief payments to 160 million American households have been immensely popular. Lawmakers are poised to build on that momentum by embracing a monthly allowance for every child, no matter who their parents are. They deserve support from the government and deserve to know it will not ensnare families of color in the endless audits prior efforts to address poverty with a supposedly color-blind tax system brought. We all do.
