I have been studying tax policy in the US for over a decade and I can say with confidence that provisions in the tax code don't go viral often.
Enter the child tax credit, which was temporarily heavily expanded in President Joe Biden's American bailout plan, with monthly payments hitting households starting July 15. The sudden deposits – of up to $ 250 per child ages 6-17 and $ 300 per child under 6 – were such a delight for many parents that the hashtags #childtaxcredit and # childtaxcredit2021 on TikTok exploded with tens of millions Calling everyone at the time of this writing.
Paul Williams, an economist and author, has compiled some of the best posts (many including Usim E. Mang's popular dance, "Alors on Danse") on a Twitter thread.
I have a preference for @yellowha's mother-and-son version:
And the account @ wifeandmomlife’s, set to the soul classic "Bound" by the Ponderosa Twins Plus One:
This is a continuation of a trend we also saw with the stimulus checks in April 2020, December 2020 and March 2021 – when the government sends cash like this outside of the normal tax filing process and to a larger population than those affected using programs like SNAP / Grocery stamps or residential vouchers according to Section 8 penetrate this policy into the public consciousness. The checks are saved. People post dance videos about them.
As someone who has endorsed these incentive payments and is deeply committed to making the new child tax credits permanent and easily accessible, this is hugely encouraging. It implies that check-based programs can avoid some of the worst pathologies of the American government and unleash one of the most powerful and positive forces in politics: political feedback.
Checks take us past the sunken state
When the US government chooses to help people, it usually does so in a veiled, even obscure way.
Take an apartment. There is no government agency whose website you can fill out a form and receive, for example, a check for $ 10,000 to help you pay a down payment on a home.
Instead, there are obscure measures and opaque institutions that are supposed to help. There is the Federal Housing Administration that insures some mortgages in the hopes that it will be easier and cheaper for home buyers to get a loan. This agency operates two quasi-state companies, Fannie Mae and Freddie Mac, that bundle mortgages and sell them to investors in hopes of indirectly making your mortgage cheaper. It also offers a tax deduction on your mortgage interest once you buy a home – but only when you list your deductions.
This system of indirect state intervention, opaque or invisible to the average person, is part of what Cornell political scientist Suzanne Mettler calls "the sunken state."
The darkness of the sunken state, argues Mettler, is costly to our democracy. It undermines public belief in the effectiveness of government by hiding the state benefits that voters receive. Another example: Middle-class Americans who receive subsidized student loans to study and deduct mortgage interest from their taxes also receive government benefits – but these benefits are not perceived in the same way as social security, for example.
Aside from keeping the government's role in improving living conditions hidden, the collapsed state has another great price to pay for. Georgetown political scientists Don Moynihan and Pamela Herd have argued convincingly that submerged state-like systems impose large "administrative burdens" on people on low incomes, from the work demands in programs such as grocery stamps to the burden of the complex parameters of income tax credit.
Steven Teles of Johns Hopkins referred to this problem as "kludgeocracy" – a government held together by "nondescript patches to solve an unexpected problem" instead of working cleanly from the start. Teles argues that this piecemeal approach also leads to exorbitant compliance costs, complicates government administration, and makes it easier for companies to siphon off government rents.
This problem has been a major concern of people studying the American government for years.
What is striking about the expansion of the tax credit for children and the impending stimulus checks is how completely they reject the model of the lost state. The payments aren't hidden or unclear to their beneficiaries: they're paid out in the form of a big fat check in the mail or a big, sudden deposit into your bank account. The IRS also sent letters to the recipients stating that they would receive the money.
Additionally, payments are all made at once, which makes it a natural thing to post on social media where your friends can go through the same thing and associate it.
Of course, that does not mean that the introduction of the child tax credit was perfect. The system for registering people who do not file taxes was far too difficult to use. But the process was much more accessible than most government programs. If something on TikTok is a meme, by definition, it's not part of the sunken state.
How politics can create new constituencies
Precisely because the expansion of the child tax credit has not subsided very much, it could unleash a political dynamic that will enable it to survive beyond 2021. This leads to a powerful and intuitive idea of political science: political feedback.
Berkeley political scientist Paul Pierson in his 1994 classic Dismantling the Welfare State? and the 1996 paper "The New Politics of the Welfare State" showed that it can be quite difficult to reverse this policy once a social policy is in place and enough people who benefit from it are aware of it and defend it can.
"People who receive benefits will react quite strongly to being stolen from them," Pierson told me in 2017, when that very dynamic prevented Republicans from repealing the Affordable Care Act. "A taxpayer pays for a lot of things and cares a little about each thing, but the person receiving the benefits will care a lot about it."
There is reason to believe that this dynamic has cooled somewhat in recent years as the parties have become more ideologically intense and polarized. Although the Affordable Care Act was not repealed, in large part because seven Senate Republicans were unwilling to stop the ACA's expansion of Medicaid coverage, it nonetheless came close to what had never happened to previous programs like Social Security or Medicare.
Now the extension of the child discount is to expire within one year. Given its huge impact on child poverty, making it permanent should be a priority for Democrats. Given the polarization of Congress and its status quo bias, one should not be overly confident about the prospect of permanent enlargement.
However, a policy with a strong, vocal base of beneficiaries who can advocate it is a strong policy. Seriously, the TikTok memes on child tax deduction give me hope that politics will build such a support base. Look at how delighted all of these parents are – and just think how angry they would be if this support were stripped from them.