Will the Child Tax Credit prevent a fourth stimulus check?
As the beginning of the Child Tax Credit approaches, the likelihood of a fourth stimulus check recedes.
July 15 is the first day that the new scheme will operate, with millions of American families being eligible for the monthly payments.
However, these payments mark a new stage in the US covid-19 recovery and one which makes the likelihood of further stimulus payments more and more distant.
Further information surrounding the Child Tax Credit:
- Will there be problems receiving IRS Child Tax Credit payments?
- $3000/$3600 Child Tax Credit: Will President Biden extend it to 2025?
- What's the difference between stimulus checks and the new Child Tax Credit?
- Fourth stimulus check: What was the unemployment rate when the last relief bill was passed?
Why are stimulus checks seemingly out?
So far the US government has sent out three stimulus checks of varying size, with the most recent being $1,400 grant from March 11. Including the rest of the economic provisions, the three stimulus packages have cost a nearly $1 trillion. While certainly popular with American people there is doubt that the country can keep paying out such large sums of money.
All this money put into the economy has been reflected in inflation, which has increased by 5.4%, the fastest 12-month growth since August 2008. Republicans have been quick to target the increasing rate and further stimuli could be opposed by moderate Democrats such as Kyrsten Sinema and Joe Manchin.
A key inflation measure is up 5.4%--the highest rate in 13 years. Biden’s inflation is a tax on the working class. https://t.co/evyEMr7UwO— Rep. Lloyd Smucker (@RepSmucker) July 13, 2021
There has also been concern about whether the stimulus checks have been effective in their goal of restarting the economy post-covid-19 but experts say that any money injected into people's bank accounts can only be beneficial long-term. For example, in the stimulus distributed in the CAREs act back in March 2020, people planned to spend only 40% of the money for themselves, the rest either went into savings or to pay off debt.
And as the US begins to leave the pandemic, there is a burgeoning jobs market of some 9.2 million vacant jobs in the country. Keeping a large stimulus available for all people could be unnecessary considering the swathe of jobs currently available.
The government cannot keep paying people forever.
And as things stands there are no plans to; Biden has not mentioned another stimulus package for months with sights firmly being set on extending the Child Tax Credit to 2025.
As I’ve said again and again: The people who really need a tax break in this country are working families. That’s why my Build Back Better Agenda will extend the expanded Child Tax Credit we passed under my American Rescue Plan.— President Biden (@POTUS) July 9, 2021
What changes with the Child Tax Credit?
While support continues for American families, those without children will not be able to benefit from the new credit.
The criteria for the Child Tax Credit are:
- Parents with children under the age of six will receive a monthly payment of up to $300 per child.
- Parents with children aged between six and 17 will get up to $250 per child.
Payments of this credit are to last for 12 months but there are hopes in the Biden administration they will be able to continue further.
And while the government support is mainly targeted toward families and the unemployed it makes the chances of another big stimulus injection more remote.
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