In Brief
A new report from the Michigan League for Public Policy (MLPP), shows that more than 2 million Michigan children – more than the populations of the Grand Rapids and Lansing metro areas combined – benefited from the federal Child Tax Credit (CTC) in 2021.
In 2020, nearly 44% of Michigan families with kids reported they were unable to afford basics such as food, clothing and medical care. In 2021, the CTC (which provided families with up to $3,600 per child) and other policy initiatives of the American Rescue Plan Act (ARPA) kept 114,000 Michigan children above the poverty line.
MLPP, a W.K. Kellogg Foundation grantee, produces the Kids Count in Michigan initiative, designed to measure the well-being of children at the state and local levels in an effort to better inform policy. The report shows that:
- 9% fewer children lived in high-poverty areas during 2021;
- 10% fewer students experienced homelessness; and
- Children with a single parent were 6% less likely than the previous year to live in poverty.
Why This Matters
Every person deserves the opportunity to thrive. Yet in Michigan, the top 1% of earners make more than 21 times as much as the bottom 99% of workers. What’s more, the bottom 20% of income earners pay nearly double the rate in total state and local taxes than the state’s top 1% of earners.
Inequitable tax structures, low wages and high inflation continue to disproportionately harm communities of color and Native communities. The poverty rate for Black, Native, and Hispanic individuals in Michigan is 24.7%, 21.31%, and 20.17%, respectively, but only 10.55% for White individuals.
The changes and expansions to CTC and Michigan’s Earned Income Tax Credits demonstrate that it’s possible to lift children out of poverty, provide families with income stability and increase racial equity. MLPP’s report shows that increases in federal relief dollars for Michigan, including $100 million through 2026 to expand housing and affordability, are already producing more equitable and positive outcomes.
The Opportunity
Data shows that now, more than ever, federal and state funding are critical tools for reducing childhood poverty, infant mortality and childhood homelessness.
With rising inflation and housing costs, raising children is becoming more expensive, and it’s hitting low- and middle-income people the hardest.
Expanding the child tax credit beyond the stimulus plan is an essential tool for reducing poverty long-term, ensuring lower-income families do not continue to take on an inequitable responsibility within the tax structure and have the income needed to raise healthy families.
Learn more:
- A clear path to reducing childhood poverty with the Child Tax Credit, Dana Linnane, Every Child Thrives, August 5, 2021
- America’s tax system must work for everyone, Robb Gray, Every Child Thrives, April 15, 2022
- One way to lift kids out of poverty? Expand EITC benefits. Every Child Thrives, May 18, 2022
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