As President Biden's Build Back Better plan takes center stage, many are wondering how that might affect them. A portion of the plan includes a child tax credit which would affect about 90 percent of families in Montana.
“Investments in children at young ages have really high returns,” said Carly Urban, associate professor of Economics at Montana State.
According to the plan, this could benefit around 198,000 to 209,000 children across the state.
“The phase-out range is actually high enough, we know that Montana earnings are relatively low that a lot of families would benefit from this,” says Urban.
According to policy analyst Jackie Semmens, the change with this tax credit is that it would make it more accessible to lower-income families in Montana; this would be an estimated 78,000 kids in Montana not already receiving a tax credit.
“For the first time ever the credit is fully available to the families who need it most,” says Semmens.
This would be a direct payment to families.
According to the Department of Health and Human Services currently, families pay around 13 percent of their income to child care.
“With the pandemic, the importance of childcare has never been so obvious; when schools close, when day-cares close we saw a lot of families struggling,” said Semmens.
Urban points out that this could help families who can't afford the cost of living in Montana.
“How do we get people who grew up here and be able to move back and afford it, this is one of those policy levers where the money is more here, more people will get it here and that might allow more families to build a life here,” said Urban.
Urban and other economists hope that long term, this money will flow back into the economy.
“Not only does it help those children but it helps parents to be more economically self-sufficient but it also helps society,” said Urban.
Right now, Congress hopes that a vote on the Build Back Better plan takes place before Thanksgiving.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.