On February 15, Elon Musk, the head of DOGE, shared a chart on X as part of his campaign to eradicate “waste and fraud” in government. This chart, labeled “IRS Welfare,” highlighted a significant increase in payments during 2021. Musk commented, “such a notable rise within such a short period doesn’t add up.”
However, several commenters noted that Musk seemed unaware of the cause behind this increase: the temporary expansion of the child tax credit included in the American Rescue Plan of 2021.
Journalist Jordan Weissmann remarked, “Today, Elon is interpreting a graph of Joe Biden’s child tax credit expansion as proof of fraud.”
Economics professor Andy Barenberg stated, “Elon Musk doesn’t realize that the Tax Cuts and Jobs Act raised the child tax credit, leading him to suggest that the increase must be fraudulent.”
Many suggested that someone with as many children as Musk should be more informed about such credits, and others pointed out that the creator of DOGE should have a better grasp of the recent developments in government spending.
Understanding the Child Tax Credit
The American Rescue Plan, implemented during the early days of Biden’s presidency, expanded the existing child tax credit, providing monthly payments, increasing eligibility, and making it fully refundable.
Research, including a study from the Brookings Institution, highlighted the expanded credit as a significant success in policy, particularly for reducing child poverty. According to Brookings, 3.7 million children were lifted out of poverty due to this credit.
Notably, this credit was designed to expire after one year. Moreover, a subsequent Biden initiative, the Build Back Better Act, which aimed to extend it, did not pass. Some elements from that package were incorporated into law in 2022 through the Inflation Reduction Act, but the expanded child tax credit was not among them.
Is the Expanded Child Tax Credit Coming Back?
In the years following, particularly after Republicans regained control of the House in 2023 and the potential return of Trump to office, discussions around expanding the child tax credit have dwindled.
During the 2024 campaign, J.D. Vance, now vice president, proposed a $5,000 child tax credit, an increase from the current $2,000. Additionally, Senator Josh Hawley (R-MO) suggested a similar measure in January.
However, it seems such proposals are not a substantial part of current congressional spending discussions. The Trump tax cuts from 2017, currently up for re-evaluation, included an increase in the child tax credit to the current $2,000, due to expire at year’s end.
Updates from the States
There are developments regarding expanded child tax credits at the state level across both red and blue states.
Ohio Governor Mike DeWine has proposed an increase to the state’s child tax credit, which would be funded in part by raising taxes on cigarettes.
Former President Donald Trump speaking with attendees at the 2023 Turning Point Action Conference in West Palm Beach, Florida.
In New York, Governor Kathy Hochul has proposed an expansion of the child tax credit, which would benefit over 2.75 million children. This plan aims to provide 1.6 million families with an annual tax credit of up to $1,000 per child under four years old, and up to $500 for children ages four to sixteen.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist, and film critic, contributing to outlets such as the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review, and Splice Today. A co-founder of the Philadelphia Film Critics Circle, Stephen resides in suburban Philadelphia with his wife and two sons. Over the past decade, he has written thousands of articles on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
