Steve LeBlanc/AP Photo
Massachusetts Gov. Maura Healey signed a tax relief package, at the Massachusetts State House in Boston, October 4, 2023, which included an expansion of the state’s child tax credit.
Last week, Massachusetts Gov. Maura Healey signed a law increasing the state’s refundable child tax credit from the current $180 to $440 per child per year. That will put over $1,300 a year more in the pockets of families with three kids. The Massachusetts law also extends the credit to disabled adults and the elderly.
It’s modest compared with the far more generous refundable credit that was part of President Biden’s American Rescue Plan Act, which provided what amounted to a universal annual child allowance of $3,000 per child ($3,600 for kids under six) and reduced child poverty by 48 percent. Republicans in Congress plus conservative Democrats refused to extend that program beyond one year.
Ten states now have refundable child tax credits. The most generous is Minnesota’s, which provides up to $1,750 per child per year and cuts child poverty by about a third. But all of these state laws have income limits, unlike the Biden credit, which was universal except for the very rich. Here is an excellent summary by our friends at the Institute on Taxation and Economic Policy.
The effort of states to pursue anti-poverty initiatives suggests both the opportunities and limitations of progressive federalism. On the one hand, states can indeed be the laboratories of democracy heralded by Louis Brandeis.
We see that in California, which has passed laws expanding rights for gig workers, requiring employers to bargain with tenant unions, and a great deal more. And in Minnesota, the school lunch program is free to all kids, so that there is no income stigma. These can be models for eventual federal laws. California has long modeled stronger environmental laws.
But on the other hand, as FDR was the first to demonstrate, only the federal government has deep enough pockets to make a transformative difference. In addition, the federal government can universalize social outlays that would never stand a chance in states that are chronically racist or beholden to economic elites. It’s at the federal level that progressive class coalitions can come together to pass legislation that would remain hopelessly blocked in reactionary states.
Does anyone think Alabama or Mississippi would enact Social Security or Medicare (not to mention civil rights laws)? Indeed, we see the sheer perversity of states that refuse to take Washington’s money to expand Medicaid. And Medicaid itself, generous in some states, threadbare in others, is a telling example of the inadequacy of programs that are federal-state partnerships.
It’s good to have progressive states step partly into the breach when action is blocked in Washington, or to pioneer new concepts. But as soon as we gain back a progressive majority in Congress, restoring Biden’s universal child allowance is the first order of business.
