Congress Makes Permanent Crucial Provisions of Pro-Work Tax Credits
Washington, DC, December 18, 2015 — Today Congress made permanent critical provisions of pro-work tax credits that lift millions of Americans out of poverty every year.
“Because of the provisions passed today, 50 million low-income working Americans will be able to keep the tax credits that help them pay for basic expenses like food, transportation, and childcare,” said Joanne Carter, Executive Director of RESULTS and RESULTS Educational Fund. “Sixteen million people will avoid falling into poverty or deeper into poverty.”
“This is a major victory for working families all across the country,” said Carter. “It’s also a victory for our tireless grassroots advocates, who did not stop until Congress made this a priority and got it done.”
During the economic crisis in 2009, Congress adjusted the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) to better support married couples, families with three or more children, and lower-income families. In 2014 alone, these tax credits lifted 9.8 million people out of poverty, including 5.2 million children. If Congress hadn’t acted, the provisions would have expired in 2017, and 50 million Americans would have lost part or all of their EITC and CTC.
These provisions were made permanent as part of major year-end tax and spending package passed by both the House and the Senate, and now headed to the White House. The legislation still does not fix the gap in the EITC for childless workers, who currently receive a maximum of only $500. It also fails to index the CTC to inflation, and the amount of $1000 per child will remain fixed.
Despite the gaps in the current legislation, the EITC and CTC remain one of our most effective tools against poverty. These tax credits promote work by allowing people to keep what they earn and pay for basic expenses like food, child care, and rent. Their local communities get an economic boost, and the children of recipients have been shown to do better in school and earn more as adults.
“Following today’s vote, millions of working families will have the peace of mind of knowing their tax credits will not drop or disappear,” said Carter. “However, real challenges remain. The much larger overall tax package adds to the federal deficit, and that will put pressure on key anti-poverty programs. The package also fails to index the CTC or fix the childless worker gap in the EITC. While this is disappointing, RESULTS will continue working to improve and strengthen the EITC and CTC in the months and years ahead.”
About RESULTS and RESULTS Educational Fund:
RESULTS and RESULTS Educational Fund are sister organizations that, together, are a leading force in ending poverty in the United States and around the world. We create long-term solutions to poverty by supporting programs that address its root causes — lack of access to health, education, or opportunity to move up the economic ladder. We empower ordinary people to become extraordinary voices for the end of poverty in their communities, the media, and the halls of government. The collective voices of these passionate grassroots activists leverage millions of dollars for programs and improved policies that give low-income people the tools they need to move out of poverty.