October 2015 U.S. Poverty Action

Save Working Families from Deeper Poverty

Congress is working to finalize a number of big issues this fall, including making certain business tax credits permanent. Yet, key provisions of the EITC and CTC will expire in 2017, which would force 16 million people into or deeper into poverty, half of them children. No matter Congress takes up tax legislation, we need to keep pushing that if they make permanent ANY business tax breaks, they must also save the EITC and CTC provisions. Set up face-to-face meetings with your  senators and representatives this month and urge them to save the EITC and CTC provisions (Congress is on recess October 12-16). We also urge you to call Senate tax aides to reiterate this message.

Tell Lawmakers and Tax Aides to Save EITC and CTC Provisions

For information on how to set up a face-to-face meeting with senators and representatives this month, see our Activist Toolkit at: http://www.results.org/skills_center/milestone_12/. Find the names of tax aides at: http://capwiz.com/results/dbq/officials/. Use the talking points below when talking to senators:

  1. Introduce yourself as a RESULTS volunteer who cares about children and families living in poverty.
  2. Ask them if they are familiar with the Earned Income Tax Credit and Child Tax Credit.
  3. Remind them that the EITC and CTC are pro-work tax credits and new Census data shows they lifted 9.8 million people out of poverty in 2014, including 5.2 million children.
  4. Tell them that studies show that children who live in EITC households grow up healthier, do better in school, and earn more as adults.
  5. Explain that key provisions of the EITC and CTC will expire in 2017. If that happens, 16 million people, including 8 million children, will fall into or deeper into poverty.
  6. Tell them it’s all about “parity” between supporting business and supporting families: no permanent extension of any business tax credits without permanently extending the EITC and CTC provisions also.
  7. Urge them to talk to Senate Finance Committee Chair Orrin Hatch and Ranking Member Ron Wyden and tell them to save the EITC and CTC provisions by making them permanent in any tax legislation that comes up this year.
  8. In addition, urge tax leaders to fix a glaring gap in the EITC for workers without children, whose EITC is so low they are actually taxed into poverty, by increasing the credit for these workers.

If you schedule a meeting or plan to attend a town hall, contact Meredith Dodson ([email protected]) for help in getting you and your group ready. After any meeting or town hall event, be sure to follow up with the congressional staff and also fill out the RESULTS Lobby Report Form at www.tinyurl.com/RESLRF.

Refresher on Expiring EITC and CTC Provisions

It’s important to remember that after 2017, the EITC and CTC will still be in place, but they will be much smaller. Here is a refresher of the provisions that will expire in 2017:

  • Reduction of the marriage penalty in the EITC. This improvement allows two EITC workers who get married to earn more income before they lose their EITC.
  • Increase the EITC for larger families. Since larger families have a higher risk of being in poverty, this improvement increased the EITC for families with three or more children (maximum increase of approximately $600 per year).
  • Lower income eligibility for CTC. This improvement allows families earning as little as $3,000 per year to claim the CTC. If it expires, families earning less than $13,000 per year will lose the CTC entirely (contrast: families earning $110,000 will still be eligible).

Responses to Possible Questions about the EITC and CTC

Objection: I am concerned with the fraud rate of the EITC.

Response: We agree there needs to be a reduction in EITC errors – but to be clear, these are often unintentional errors, not fraud. As we both know, filing taxes can be complicated, especially in complex family situations like when parents divorce.  Studies indicate that often these aren’t errors, and 85 percent of children are claimed correctly. Steps have been taken to reduce the EITC error rate, and more steps should be taken – we hope you will support that effort. I can send you more details about the Treasury Department’s recommendations. Nevertheless, it’s imperative that the error rate not be used as an excuse to penalize honest hard-working families by failing to maintain the EITC and CTC provisions currently scheduled to expire after 2017.   

Objection: Why are we talking about this now? These improvements don’t expire until 2017.

Response: Actually, this is best time to deal with this issue. Some in Congress have signaled that they will try to make some or all business tax breaks (including the so-called “tax extenders”) permanent, without offsetting the cost. Congress must show they support working families by making the EITC and CTC provisions for modest-income working families permanent as well. This is good policy and hard-working Americans shouldn’t have the threat of deeper poverty hanging over them for months or years on end. It’s the right thing to do.

Objection: Don’t worry, I support the EITC and the CTC, you don’t need to talk with me.

Thank you so much but we’re really worried that these programs could get lost and not be included in a tax deal and we’d be hugely grateful for your active support on this. We need supporters to be actively talking to leadership and their colleagues about the importance of the EITC and CTC to America’s working families. Without your voice and active participation in this effort, negotiators will assume they can ignore these provisions in any final tax deal. We’d like to follow up with your office after you’ve talked with Senate leadership – when should we do that?