A report from a think tank observes that states with significant small-town and rural populations — which is a perfect description of Mississippi — stand to receive a lot of money from the expanded child tax credit that in July started sending $300 per month per child to 39 million households.
A columnist on The Washington Post website used that information to note that many of these states are represented by Republican lawmakers, who voted unanimously against the COVID-19 rescue bill that expanded the tax credit and set up the monthly payments.
“While just about all Republicans supported the previous version of the child tax credit, and the policy has a bipartisan history, the rub here is that the expansion of it to poorer families — which Republicans oppose — will itself have an outsize impact on rural residents and red states,” columnist Greg Sargent wrote.
The Niskanen Center, which bills itself as a moderate think tank supporting environmentalism, immigration reform, civil liberties and stronger social insurance with market-oriented principles, estimates that over the next year, the $300 payments will increase consumer spending by $27 billion. They also will generate $1.9 billion in sales tax revenue and support more than 510,000 full-time jobs.
The report included a chart that ranks Mississippi and Louisiana highly when estimating the expanded tax credit’s impact. While the more populous states — such as California, Texas and Florida — will get more money from the program because of their sheer numbers, Mississippi is among the smaller states that will receive a greater benefit.
When adjusted for population, Mississippi’s estimated $391 per capita impact from the tax credit is second only to Alaska’s. If Niskanen’s figures are correct, Mississippi households will receive $1.17 billion through June 2022.
Louisiana ranks third on this list, with an estimated $377 per capita impact. Its households will receive $1.75 billion over the next year.
A different measurement — the impact of the payments on the economy — ranks Mississippi first. The report predicts the payments will add 0.98% to the state’s gross domestic product. Louisiana ranks ninth with a 0.67% boost.
Sargent, in the Post, observed that the top nine states on the per capita list are “red states, as are all states in the top 10 list of economic impact. This is because rural states have a larger percentage of poor and working-class residents. Since these groups will use much of their monthly money to buy goods and services, the payments will have a larger impact on smaller economies.
Sargent is no fan of Republicans.
But he has a point when he writes that the GOP, which is rebranding itself as a party of the working class, chose to miss the boat on the expanded child tax credit. Instead it’s the “coastal elite” Democrats, of all people, whose additions to an existing program will help the working class and the small, rural states.
Jack Ryan is the publisher and editor-in-chief of the Enterprise-Journal.
