"The Earned Income Tax Credit is the most effective anti-poverty program in the United State. It both encourages and rewards work by allowing low-income workers to recoup money that otherwise would have gone to taxes. And since low-income people are more likely to spend their income than to save it out of necessity, it is also an economic stimulus." – Alice Lieberman, Professor, University of Kansas School of Social Welfare.
With only a few weeks left in the year, Congress is debating a series of key issues for working families. One of the most important is the fate of key parts of two tax credits that help millions of low-income working Americans.
The two credits — the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) — are powerful tools that reduce poverty and encourage and reward work. Together, they lift more children out of poverty than any other program, while also promoting greater mobility and opportunity for families. And, with four million African American children living in poverty today, the EITC and CTC make a critical difference in our communities.
In 2009, President Obama signed into law temporary improvements to the credits that dramatically expand access to the CTC to very low income working families and provide additional help for some families receiving the EITC.
Although these very important improvements to both tax credits were extended in 2012, they will expire in 2017 unless Congress acts to make them permanent.
This fall may be the best opportunity that Congress has as it debates legislation that could make some business tax breaks permanent. As the House and Senate consider this legislation, they cannot leave working families behind. They must make the improvements of the EITC and CTC permanent as well.
If they don’t, African Americans would be disproportionately harmed: two million working African American families and 4 million children would lose an average of $1,200 per year. A single mother of two working full time at the federal minimum wage would lose every penny of her CTC.
“In many cases, these two measures are what allows working families to stay in their homes,” said Don Cravins, Jr., Executive Director of National Urban League Washington Bureau. “The consequences of ending the credits would be nothing of devastating.”
In the course of these discussions, Congress also has a chance to address the plight of lower-income workers without kids, many of whom are left out of the EITC. Expanding the EITC to cover these workers has bipartisan support and would help promote work, could reduce incarceration rates, and boost earnings.
The Obama administration is calling for Congress to make the improvements to these working family tax credits permanent.
Now is the time to make your voice heard in the halls of Congress. You can help by contacting your senators and representatives, urging them to make the improvements to the EITC and CTC permanent and reminding them of the importance of fixing the glaring hole in the EITC that leaves out childless workers without kids.
With your help, we can make the key provisions of these credits permanent so that they can keep making a difference in our communities.
Marc Morial is the president and CEO of the National Urban League.