Universal Child Allowance
$300 per month for each child under six and $250 per month for each child ages six through seventeen, in 2026 dollars. The chapter proposes automatic monthly delivery through Treasury with phase-out only at high incomes.
Income security · Chapters 18 & 19
An Income Floor Without a Poverty Trap
The design tries to do two things at once: reduce poverty and preserve a clear payoff to additional work. The book therefore treats benefit cliffs as a system-design problem rather than as a feature of any single program.
Work and Security Credit
The book would replace the EITC with a monthly earnings supplement whose phase-out is no more than 20%, designed to preserve a visible return to additional work.
Combined marginal-rate ceiling
Treasury would publish representative-family analyses and coordinate tax and benefit phase-outs so combined taxes and benefit reductions do not exceed 60% for covered representative families.
Poverty trap visualizer
What happens to the next $100 of earnings?
The status-quo example reproduces the chapter's worked hypothetical: payroll tax plus overlapping EITC, SNAP, and rent phase-outs can absorb roughly $83 of the next $100 before income tax. The coordinated example keeps about $48 of that $100; the proposed ceiling guarantees at least $40.
The $83 figure is a chapter-specific hypothetical, not a claim that every low-income household faces an 83% marginal rate. Actual effective rates vary substantially by income, family type, state, and program participation.
Worked status quo
Book coordination example
60% ceiling floor
Worked current clawback$83
Worked coordinated clawback$52
Benefit Cliff Smoother
Compare abrupt eligibility losses with a graduated phase-out.
Move annual wages from $0 to $80,000. The orange dashed curve is a deliberately simplified cliff-prone program stack inspired by Chapter 19's overlapping-phase-out example. The teal curve applies one smooth withdrawal schedule. Neither line is a state-specific eligibility calculation.
Modeled support, cliff-prone$0
Modeled support, graduated$0
Next $1,000 modeled benefit withdrawal0% / 0%cliff-prone / graduated
Cliff-prone illustrative stackGraduated phase-out
What would the child allowance mean for your family?
My Plan combines the child allowance (net of the Child Tax Credit it replaces), the Health Trust contribution, and the 7% child-care cap for any household.
The proposal in brief
At a glance
Goal
A floor under children and working households without making the next dollar of earnings economically pointless.
Instrument
Universal Child Allowance; Work and Security Credit with phase-out no greater than 20%; 60% combined marginal-rate ceiling; adult-floor pilots before national expansion; automatic Treasury delivery.
Who pays
Child allowance $100–130B/year and Work and Security Credit $30–60B/year above current law. Author planning estimates.
Who implements
Treasury and IRS for payments and marginal-rate analysis; Social Security Administration for identity/in-person help; Agriculture and housing agencies for coordinated phase-outs; states for SNAP and employment services.
Principal risk
A permanent unconditional allowance could reduce work more than expected, or automatic delivery could produce fraud and error on a large scale.
Measure / failure trigger
Child Supplemental Poverty Measure below 5%; no representative family above 60% combined marginal rate; parent employment stable or rising; if parent employment falls more than two percentage points relative to trend or improper payments exceed 10%, redesign is triggered.
The Strongest Counterargument & Our Response
Best case against
The hardest objection is that a permanent cash floor can reduce labor supply and is expensive even when the economy is strong. A simpler system can also pay the wrong person automatically at scale, and coordinating federal and state benefit phase-outs is administratively difficult.
The author's response
The chapter therefore pairs an unconditional child benefit with a work-linked credit, caps its phase-out, coordinates overlapping benefit withdrawals, and proposes large pilots before any adult income floor. It also makes work participation and improper-payment rates explicit failure measures.
What remains uncertain
The size of labor-supply effects at national scale, the administrative feasibility of a real-time marginal-rate ceiling across programs, and the final cost after interactions with existing credits require microsimulation and staged evaluation.