LINCOLN - New research indicates that cities can significantly reduce childhood poverty by implementing their own child tax credit programs. An analysis by the Center on Poverty and Social Policy at Columbia University and the Institute on Taxation and Economic Policy found that offering $1,000 or less annually to low- and middle-income families could decrease child poverty rates by up to 25% in several cities. The study focused on 14 cities, including Chicago, Denver, and Los Angeles, and concluded that most could achieve this impact by allocating less than 15% of their municipal revenues to such programs.

Implementing these programs could also stimulate local economies by increasing household spending, boosting demand for local businesses, stabilizing housing markets, and enhancing local tax revenues. While cities without existing income taxes may face challenges in establishing these programs, the success of pandemic-era basic income initiatives demonstrates that cities can distribute funds through standalone applications, leveraging IRS data-sharing agreements or collaborating with third-party administrators. Advocates support refundable tax credits, which provide financial relief even to families with minimal or no income tax liability, thereby offering direct assistance for essential needs like groceries and childcare.

For the full article, click HERE.