A recent presentation at the Center for American Progress included several experts who stressed the importance of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).
The most moving testimony came from Barbara Izquierdo, a mother of two children who said “EITC changed my life.” It’s not just about the money, she said, but it offers hope. She talked about what it was like for her to grow up in poverty and how hard it was to escape from poverty and the domestic violence situation she later found herself in. She now works for a coalition against hunger, helping other mothers get the help they need. Barbara said the increase in EITC last year helped her to become independent, and gave her the confidence that she could be a good mother for her children and also pursue her dream of college and a career.
Meg Newman, a coordinator of a Volunteer Income Tax Assistance (VITA) outreach program, talked about how thrilled parents are when they find out they are eligible for tax credits. She sees how EITC and CTC help fill the gap between wages and what it costs to raise a family.
Michael Linden, a tax policy analyst, said that the American Recovery and Reinvestment Act (ARRA), enacted last year, included some temporary enhancements to the EITC and CTC that should be extended. These enhancements included a reduced income threshold for eligibility for the CTC, and added EITC benefits for families with three or more children. He estimated that 18 million additional children have benefited from the enhancements to EITC and CTC.
Many of the improvements to EITC and CTC will expire at the end of 2010 if Congress does not act to extend them. Jason Furman, Deputy Director of the National Economic Council, said that these tax credits have had bipartisan support in the past -- Congresspeople usually like tax credits that are linked to work and help the middle class.
Extensions of the tax credits will be part of the debate about extending the “Bush tax cuts” that were enacted in 2001 and are set to expire at the end of this year. The Obama Administration’s position is that the tax cuts should be extended only for people making less than $200,000 per year (or married couples making less than $250,000 per year) and the improvements to EITC and CTC that were enacted in ARRA should be made permanent.
For more information on tax credits for working families, see http://chn.org/pdf/2010/TaxCreditsforWorkingFamiliesfactsheet.pdf