The Republican’s tax reform plan was released on Thursday. In the plan, the GOP made good on a promise to expand the federal child tax credit, doing so modestly, but the number of people benefiting from that tax credit, which reduces costs by $1000 per child under age 17, got lower. If the legislation passes, the CTC will no longer be available to undocumented immigrants with American children. That change will, at least indirectly, affect some four million children.
The new provision is not actually totally new. When Jeff Sessions was the senator of Alabama, he tried to pass a law called the Child Tax Credit Integrity Preservation Act. Many prominent Republicans have previously expressed interest in making the tax credit unavailable to undocumented work on the grounds that those in the country illegally should not benefit from government programs.
The logic makes a punitive sort of sense on its face, but it’s also problematic and seems to misunderstand the relationship of undocumented immigrants to the IRS. A large percentage of undocumented immigrants file taxes not only because their work demands it, but also because it is good practice as they fight for legal status in the United States. In fact, billions of dollars of taxes go unclaimed at the Social Security Administration per year because undocumented immigrants, using forged papers, send in taxes and when the SSN doesn’t match any existing US citizen, the funds get moved to the “Earnings Suspense File.” Today, there are at least 340 million unclaimed tax reforms. The money that is never claimed ends up being divided and doled out to senior citizens, meaning that the Social Security wages that undocumented immigrants pay will most likely never be paid back to them. As baby boomers age, this fund will become increasingly important.
Besides the fact that many employers require papers from their undocumented employees and send in W-2’s to keep everything above board, paying taxes gives undocumented immigrants a paper trail that helps them establish documented status in the United States. The group most likely to be going through that process in a dutiful way? Parents of American children.
It’s also worth noting that the Childcare Tax Credit does not exist to benefit parents. It exists to help pay for childcare, which has grown significantly more expensive over the last decade. Given that there are long term effects when children are not raised in stable environments, the program can be best described as a humane way to save Americans money and suffering. And it is worth noting again, many of the children that will be effected by the change are American.