Poverty rate increased in 2022 following Child Tax Credit expiration

Child tax credit expiration overview: 

• Who: The U.S. Census Bureau released data showing that child poverty has increased following the end of pandemic-era government benefits. 
• Why: Government benefits that lapsed in 2022 included temporary expansions to the Child Tax Credit and Earned Income Tax Credit, among other things. 
• Where: Nationwide. 

Child poverty in the US has more than doubled following the end of COVID-19 era government benefits and increase in inflation, according to data released earlier this month by the U.S. Census Bureau. 

The Supplemental Poverty Measure — which takes government benefits people receive into account — increased by 4.6% to 12.4% from between 2021 and 2022, meanwhile, according to the U.S. Census Bureau data.

“This increase can be attributed to key changes in federal tax policy, including the expiration of temporary expansions to the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) as well as the end of pandemic-era stimulus payments,” the agency said, in a news release.  

Several pandemic-era government benefit programs lapsed in 2022, including the expansion of the EITC and a full refundability for the CTC and Child and Dependant Care Credit, according to the U.S. Census Bureau.

“The contraction in federal tax programs led to a substantial decline in real post-tax income between 2021 and 2022,” the agency said. 

Income inequality in the US decreased for first time since 2007 when based on pre-tax income, data says

Despite the rise in child poverty, data showed income inequality in the US has decreased for the first time since 2007 — based on pre-tax income — on account of declining income for those in the middle and top income brackets, reports AP News.

Income equality reportedly increased when calculated using after-tax income, meanwhile, with the result also connected to the expiration of pandemic-era tax credits, according to a report by the U.S. Census Bureau on income, poverty, and health insurance. 

In total, the amount of individuals in poverty last year came out to 37.9 million people for an increase of 11.5% — a percentage the Census Bureau said is not significantly different from what it was in 2021. 

“Neither the rate nor the number in poverty was significantly different from 2021,” the agency said. 

In other news involving income, the U.S. Department of Labor proposed rules earlier this month that aimed to increase the salary threshold necessary to obtain overtime eligibility. 

Do you believe the end of pandemic-era government benefits has hurt child poverty? Let us know in the comments! 

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