Extend Tax Credits to the Poor

October 12, 2015. The following op-ed by Ron Deutsch appeared in the Times-Union.

Millions of Americans go to work each day, sometimes balancing multiple low-wage jobs, and yet they still struggle to make ends meet for themselves and their families. The fact is, far too many hardworking Americans slip into poverty each year. I see this firsthand in my role at the Fiscal Policy Institute.

We do, however, have two powerful and effective tools that encourage work and help lift working families out of poverty by ensuring that they get to keep more of their hard-earned dollars to pay for essentials like groceries, reliable transportation, and child care. These proven tools are the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). And they work—in a single year, these credits lifted 9.4 million Americans out of poverty, including 5 million children. In our state, the credits lifted 307,000 children and 597,000 New Yorkers overall out of poverty.

But important provisions of the EITC and CTC will expire in 2017 unless Congress acts. Fortunately, there is a critical opportunity this fall for Congress to make these provisions permanent.

Currently, Congress is considering whether to extend or make permanent various tax provisions, including tax breaks for businesses.  Congress should not consider making any business tax breaks permanent without also doing the same for the EITC and the CTC provisions that benefit millions of hardworking families. Both the EITC and CTC have enjoyed bipartisan support over their history, and it’s time for Congress to once again demonstrate support for these crucial tax credits. We simply can’t afford to leave America’s hardest working families and communities behind.

If Congress lets important provisions of these tax credits expire, more than 50 million hard-working Americans, including 25 million children, stand to lose a crucial piece of their family budgets. In our state, 755,000 working families and over 1.4 million children would lose all or part of their tax credits.

Significant research tells us the effects of the EITC and CTC are long-lasting. Children in families who receive a boost from policies like the EITC and CTC are healthier, do better in school, and are more likely to go to college and earn more as adults. This means today’s investment in these tax credits goes far beyond the hardworking Americans who receive them; our economy and our children will reap the benefits for years to come.

A single mother with two children who works full time at the federal minimum wage would lose her entire Child Tax Credit. That’s money that could have put food on the table, gas in the car, and school supplies in her child’s backpack.

Most of our upstate cities have horrendously high child poverty rates, some higher than 50 percent. The EITC and CTC are a lifeline for many of these families.

I and many other organizations in New York that are combatting poverty are asking our lawmakers to save key provisions of these tax credits.

While they’re at it, our legislators should work to close the glaring hole in the EITC for very low-income working childless adults that both means they are virtually taxed into poverty and causes young workers without kids to miss out on the tax credit entirely.

The EITC and CTC not only help individuals living in poverty, but they put much needed federal dollars back into local economies.

In 2012, the Earned Income Tax Credit put about $4 billion into the New York State economy and more than $122 million into the Capital Region area alone. This not only helps poor families but small businesses as well.

We are a nation that values hard work. Every family deserves the chance to work toward a brighter future; the EITC and CTC are important components of making this a reality for more of our community members.