Expanded Child Tax Credit is A Factor to Rising Poverty Rates
Poverty rates in the United States increased to 12.4% in 2022 driven by the end of COVID relief programs, such as the expanded Child Tax Credit.
Poverty rates in the United States increased to 12.4% in 2022 due to the end the expanded Child Tax Credit and other COVID relief programs. (PHOTO: Pacific News Center)
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Poverty Rates Rises to 12.4% Due to the End of the Expanded Child Tax Credit
In 2022, the United States saw an increase in poverty rates after years of decline, primarily due to the end of COVID relief programs like the expanded Child Tax Credit, says a report from the U.S. Census Bureau. While the official poverty rate stayed at 11.5%, the Supplemental Poverty Measure (SPM) for 2022 rose to 12.4%, marking its highest increase since 2010. Particularly concerning is the SPM child poverty rate, which more than doubled from 5.2% in 2021 to 12.4% in 2022.
The SPM is seen as a more accurate measure of poverty as it considers various government programs and factors in regional differences in housing costs, taxes, work expenses, and medical bills.
This increase in poverty is attributed to changes in federal tax policies, including the end of the expanded Child Tax Credit and Earned Income Tax Credit, along with the cessation of pandemic stimulus payments. Additionally, the report shows a decline in real median household income from $76,330 in 2021 to $74,580 in 2022.
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Crucial Social Safety Nets and the Expanded Child Tax Credit
Social Security remained a crucial program, lifting 28.9 million people out of SPM poverty, while refundable tax credits helped 6.4 million people, down from 9.6 million in 2021.
Experts warn that if lawmakers don’t strengthen safety net programs like these, the poverty situation may worsen in the coming years. These programs played a vital role in reducing poverty during the pandemic, alongside the expanded Child Tax Credit, expanded unemployment benefits, Medicaid, and food stamps.
President Joe Biden pointed out that the rise in poverty was no accident and highlighted Republican opposition to extending the expanded Child Tax Credit as a contributing factor.
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