There is a proposal circulating among US parents to distribute stimulus checks.
Mitt Romney, a Utah senator, proposed the Family Security Act.
The Family Security Act aims to reduce child poverty by providing most parents with a $350 monthly payment for each child under the age of six and a $250 monthly payment for each older child up to the age of seventeen.
The maximum monthly amount allowed per family is $1,250.
The benefit will be available to all families with a single tax-filer earning up to $200,000 and joint-filer households with children earning up to $400,000.
What if I earned a little bit more than the maximum?
According to the information received, single filers and joint filers who earn more will receive $50 less for every $1,000 earned above those thresholds.
“Unlike the Child Tax Credit, there is a catch to the proposal: beneficiaries must work, volunteer, or train for at least 80 hours per month, which is likely why it hasn’t become official yet,” Dave Basner explained.
“While members of both parties support assisting families, requiring work is a sticking point that is currently being negotiated.”
According to one study, Romney’s proposal could lead to an increase in overall poverty.
The proposal, according to Washington State University, is intended to alleviate child poverty.
WSU’s Economic Modeling, on the other hand, discovered evidence that would cause poverty to rise among single-mother families.
Poverty among single-mother families could rise from 26.5 percent to 45.5 percent, tripling the number of children living in extreme poverty.
“Using a structural model to evaluate this specific proposal shows that reducing incentives to work will create more poverty among single-mother families, and thus it is likely to increase deep child poverty as well,” said Salvador Ortigueira, senior author of the study and a WSU professor of economics.
The proposal, according to the WSU study, would replace the Earned Income Tax Credit, which low- and middle-income working parents receive when they file their taxes.
To help pay for the cash transfers, it would also eliminate another aid program, Temporary Assistance for Needy Families.
“There is a distinction to be made between tax credits and non-conditional income assistance when it comes to assisting people in poverty. The current policy is a hybrid of the two “Ortigueira stated
“Moving the mix from a tax credit to a guaranteed income can have very large effects, especially for the population of single mothers, who are very sensitive to these changes.”