There’s plenty to appreciate about the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). We know these credits help working families raise their children, meet their daily needs and support their communities. Research abounds on how the EITC and CTC supplement wages and increase income, offset financial strain, encourage work and support children’s healthy development from birth to high-school graduation.
The credits could do so much more for our children and families.
The EITC and CTC are among the precious few tax tools that reach low- and moderate-income families. Strengthening these credits would also strengthen our families and communities. There are a number of ways to give these credits a boost. Here’s a brief sampling:
1. Expand the EITC. Increasing the credit for families with lower-levels of income would reduce poverty.
2. Expand the CTC. Making the full value of the CTC available to families, rather than excluding families with low earnings, would reduce poverty. And since research tells us that more income makes a particularly great impact on young children’s development, boosting the credit for young children in the lowest-income families would have great benefits.
3. Extend the EITC. “Childless” workers, or workers who don’t claim children on their taxes, are essentially locked out from the EITC’s benefits. This exclusion fails to capture the complexity of many family situations, including noncustodial parents, older siblings and extended relatives who help to support children. Extending the EITC to childless workers would increase these families’ resources.
4. Lifting restrictions to the EITC and CTC. Working families pay taxes. Immigrant families are working families who pay taxes. Yet Social Security Numbers are required to claim the EITC and CTC. This denies benefits to millions of working families.
Straightforward adjustments to the EITC and CTC would go a long way to lift working families. Congress clearly feels no guilt about adjusting the tax code to benefit the nation’s wealthiest—the 2017 Tax Cuts and Jobs Act, which gave away nearly $2 trillion in lavish tax cuts and handouts to the rich are proof of that. What if lawmakers were bold enough to tweak tax policy for hardworking low- and middle-income families too?