I’ve been covering tax policy in the US for over a decade now, and I can confidently say that provisions in the tax code do not often go viral.
Enter the child tax credit, which was greatly expanded temporarily in President Joe Biden’s American Rescue Plan, with monthly payments hitting households starting on July 15. The sudden deposits — of up to $250 per child ages 6-17, and $300 per child under 6 — were such a delight to many parents that the hashtags #childtaxcredit and #childtaxcredit2021 blew up on TikTok, with tens of millions of views under each as of this writing.
I’m partial to @yellowha’s mother-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 of April 2020, December 2020, and March 2021 — when the government sends out cash like this, outside of the normal tax return process and to a larger population than those affected by programs like SNAP/food stamps or Section 8 housing vouchers, that policy penetrates the public consciousness. The checks get memed. People post dance videos about them.
As someone who supported those stimulus payments, and strongly supports making the new child tax credit payments permanent and easy to access, this is tremendously encouraging stuff. It implies that check-based programs can avoid some of the worst pathologies of American government, and unlock one of the most powerful, and positive forces in politics: policy feedback.
Checks are moving us past the submerged state
Usually, when the US government decides to help people, it does so in a veiled, even inscrutable way.
Take housing. There is no government agency whose website you can go to, fill out a form, and receive, say, a $10,000 check to help you with a down payment for a house.
Instead, there are obscure measures and opaque institutions that aim to help. There’s the Federal Housing Administration, which insures some mortgages in the hope of making it easier and cheaper for homebuyers to get a loan. That agency runs two quasi-governmental corporations, Fannie Mae and Freddie Mac, that bundle mortgages and sell them to investors, in the hope of indirectly making your mortgage cheaper. It also offers a tax deduction for your mortgage interest, once you buy a house — but only if you itemize your deductions.
That system of indirect government interventions that are obscure or invisible to the average citizen are part of what Cornell political scientist Suzanne Mettler calls “the submerged state.”
The obscurity of the submerged state, Mettler argues, has major costs for our democracy. It erodes public belief in the effectiveness of government by hiding from view the government benefits voters receive. Another example: Middle-class Americans who got subsidized student loans to pay for college, and deduct mortgage interest from their taxes, are getting government benefits, too — but those benefits aren’t perceived the same way as, say, Social Security.
In addition to keeping government’s role in improving lives hidden, the submerged state has another major cost. Georgetown political scientists Don Moynihan and Pamela Herd have argued compellingly that submerged state-like schemes impose major “administrative burdens” on low-income people, from work requirements in programs like food stamps to the burden of navigating the earned income tax credit’s complex parameters.
Johns Hopkins’s Steven Teles has called this problem “kludgeocracy” — a government held together through “inelegant patch[es] put in place to solve an unexpected problem” rather than designed to work cleanly from the start. Teles argues this piecemeal approach also leads to exorbitantly high compliance costs, makes government administration more difficult, and makes it easier for businesses to extract rents from the government.
This problem has, for years, been a major concern for people who study American government.
What’s striking about the child tax credit expansion, and the stimulus checks before it, is how completely it rejects the submerged state model. The payments are not hidden or obscure to their beneficiaries: They take the form of a big fat check in the mail, or a big, sudden deposit in your bank account. The IRS also mailed recipients letters explaining they were going to get the money.
What’s more, the payments all happen at once, making them a natural thing to post about on social media, where your friends will be going through the same thing and find it relatable.
This is not, of course, to say that the rollout of the child tax credit was perfect. The system for signing up people who don’t file taxes was far too difficult to use. But the process has been much more accessible than most government programs. If something’s a meme on TikTok, it pretty much definitionally is not part of the submerged state.
How policies can create new constituencies
Precisely because the child tax credit expansion is not very submerged, it could unlock political dynamics that allow it to survive past 2021. This gets at a powerful and intuitive idea from political science: policy feedback.
Berkeley political scientist Paul Pierson, in his classic 1994 book Dismantling the Welfare State? and 1996 paper “The New Politics of the Welfare State,” has demonstrated that once a welfare policy is enacted, and enough people who benefit from it are aware of it and able to defend it, that policy can be quite difficult to roll back.
“People who are receiving benefits, they’re going to react pretty strongly to that being taken away from them,” Pierson told me in 2017, when precisely these dynamics were stopping Republicans from repealing the Affordable Care Act. “A taxpayer is paying for a lot of stuff and cares a little bit about each thing, but the person who’s receiving the benefits is going to care enormously about that.”
There’s reason to think this dynamic has cooled a bit in recent years, as parties have become more ideologically intense and polarized. While the Affordable Care Act was not repealed, in large part because seven Senate Republicans were unwilling to repeal the ACA’s expansion of Medicaid coverage, it still came close, which never happened to earlier programs like Social Security or Medicare.
Now, the child tax credit expansion is set to expire within a year. Given its tremendous impact on child poverty, making it permanent should be a priority for Democrats. Considering how polarized Congress is, and its status quo bias, one shouldn’t be too confident about the prospects of a permanent expansion.
That said, a policy with a strong, vocal base of beneficiaries who can advocate for it is a strong policy. And, in total seriousness, the TikTok memes about the child tax credit give me hope that the policy is building that kind of base of support. Look at how delighted all these parents are — and just think how furious they’d be to have this support taken away.