Should policy assume that people know what is in their best interest? That is a question looming over policy debates around “child allowances.” The American Rescue Plan Act includes a temporary expansion of the child tax credit, effectively creating a child allowance of $3,000 to $3,600 per child set to expire at the end of 2021. The allowance is more generous than the tax credit, paid monthly, and extends to non-workers.
Conservatives, including this author, have pushed back against this proposal (and the ambition to make it permanent) by arguing that it runs the risk of increasing the number of single parents, and more specifically, the number of non-working single parents. A child allowance might reduce poverty in the short-run, but it could stand in the way of increasing upward mobility and reducing entrenched poverty in the long-run.
Many child allowance advocates, however, have taken a different position. So what if more people choose single parenthood or non-work over marriage and work? Who are we to worry? People know best what is in their own interest and in their children’s interests. Why should we make benefits conditional on work anyway?
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