This week, American parents started receiving their first round of Child Tax Credit payments from the IRS. And if you go on TikTok right now and type in “child tax credit,” or “ctc,” or “#childtaxcredit2021,” you’re going to find a lot of content. Much of it is financial advice from creators telling their followers how to claim the credit and how it will affect with their tax refunds next April. Sensible stuff! But a lot of it is more typically delightful TikTok nonsense—dances and riffs on already-viral memes—because that’s how good it feels when the kiddo check hits your direct deposit. Jain Family Institute fellow Paul Williams conveniently strung a ton of them together on Twitter. Thanks Paul!
To some extent, these clips are just another reminder that Americans really, really love checks. But I think they’re worth dwelling on a moment further. After all, the Child Tax Credit is not new. It’s been around for years, beefing up people’s tax refunds as part of what’s sometimes referred to as the “submerged welfare state”—the massive thicket of credits and deductions buried in the IRS code, which the United States has used to subsidize everything from health insurance to retirement to homeownership to parenthood.
Running social policy through the tax system often makes it more opaque and inefficient, and frequently obscures the fact that the government is giving you something. To some politicians, this furtiveness has actually been a feature, not a bug; thanks to the 1980s and 1990s welfare backlash, many Democrats became terrified of being accused of giving voters handouts. Better to provide tax breaks and complicated wage subsidies that “reward work.”
One result of that approach, however, has been to sap whatever enthusiasm a lot of Americans might have had these programs. Republicans doubled the value of the CTC in their 2017 tax bill, but people weren’t exactly dancing over it on the internet—probably in part because the overall bill was deeply unpopular and the increase was partly meant to balance out the elimination of personal exemptions, but also because it’s unclear how many people even knew the benefit was expanding.
Democrats have now taken part of the submerged welfare state and brought it above water. Yes, they made the Child Tax Credit bigger: For families earning up to $150,000, they bumped the value to $3,600 per child under 6, and $3,000 for older kids (the payment phases down for higher earners). They also made it available for the first time to America’s poorest families by making the entire credit “fully refundable”—meaning that once a parent’s federal income tax liability has been zeroed out, they can collect the rest as cash. But crucially, they’ve turned it into a monthly benefit. There’s a public-policy rationale for doing so: It makes sense to give people regular payments that smooth out their incomes and help cover regular expenses, rather than a big annual lump sum they have to carefully parcel out on their own. But also, obviously, it’s a very good move for PR purposes. People know the government—in this case, Joe Biden and the Democratic Party—are sending them checks, and they’re going to get a reminder of it in their bank account every month. In my favorite video, a mom turns to the camera and says: “So I got my first child tax credit payment today, which means the government has officially paid me more child support than my baby daddy ever has.”
I mean, I hope it’s just a cheeky joke! But either, way, it is good for Democrats and progressives more broadly when people realize they’re benefitting from government intervention. If you make people so happy that they want to dance, I bet there’s a good chance they’ll want to vote for you too.