Letter: Massachusetts lawmakers must look beyond interests of wealthy by including $600 Child and Family Tax Credit

“As Massachusetts lawmakers strive to make the state more affordable and competitive through their long-awaited tax relief package, they must look beyond interests of the wealthy and prioritize all children and families by including the $600 Child and Family Tax Credit.

“Currently, tax relief plans from both chambers are in conference committee where top legislative leaders will consider differences and advance a final compromised bill. House and Senate proposals include important provisions that would provide sustained financial support to Massachusetts families and workers through a boosted state Earned Income Tax Credit and a streamlined Child and Family Tax Credit. However, one key difference between the House and Senate proposals is the benefit level of the Child and Family Tax Credit. The House-proposed benefit will ultimately reach $600 per dependent and be indexed to inflation, while the Senate version will provide a flat credit of $310 per dependent. For a family with three children this would mean receiving $1,800 annually compared to $930 – significant dollars which would go much further in helping cover caregiving and family expenses.

“Tax relief plans also include multiple provisions geared toward making Massachusetts more favorable for businesses and households with considerable wealth, including a tax cut to estates valued at $2 million and larger and a cut in the capital gains tax. These proposals are in line with the theory championed by conservative lawmakers and interest groups that high taxes on the wealthy and businesses are driving people out of the state. While these factors may drive some to leave Massachusetts, there is no evidence to suggest they are driving largescale outmigration. In fact, Massachusetts has a lower out-migration rate among high income households than 40 other states. Additionally, considering 37% of net residential outflow is made up of residents aged 26 to 35, it is likely that factors like the highest child care costs and the third highest rental costs in the nation are driving outmigration especially among low- and middle-income folks. So, to truly make Massachusetts more affordable and competitive for all, legislators must ensure that all families have the economic resources to meet their basic needs.

“Tax credits are proven programs that lift children out of poverty, improve health, and support economic mobility. The temporary expansion of the federal Child Tax Credit (CTC) in 2021 significantly reduced childhood poverty, improved caregiver mental health, and helped families better afford basic necessitates such as food, housing, education, and childcare. In Massachusetts alone, the CTC went to 721,000 families and over 1 million children. A state Child and Family Tax Credit would reach a similar number of families. In the senate’s 1st Bristol and Plymouth district the benefit would impact over 24,000 children.

“The Massachusetts Child and Family Tax Credit will be a fraction of the federal CTC but in tandem with other benefits will be an effective tool to reduce economic burdens. Data from the expanded federal CTC reveals that families spent their benefits on basic needs including helping a quarter of recipients with young children cover child care costs. Building on this evidence, 10 states have expanded or implemented new state child and family tax credits as a tool to address rising costs across the country. As child and dependent care costs in Massachusetts continue to weigh heavily on families, the Child and Family Tax Credit will help low-income families make child care payments, support families who do not quality for child care assistance, and support those sitting on extensive waitlists unable to access subsidies. The program will also provide relief for families who care for children and dependents at home or rely on informal care networks such as extended family, friends, and neighbor care. By putting cash back into families’ pockets, the benefit is also flexible to cover other costs associated with caregiving.

“With the increased EITC and streamlined Child and Family Tax Credit, Massachusetts now has an opportunity to become a leader in supporting families by making the state affordable and competitive for all. Passing a $600 Child and Family Tax Credit would be a major step towards achieving this goal.”

By Jeremy Rosen, masters in public policy candidate at Brandeis University, intern at Children’s HealthWatch, Project Manager at Strategies for Children