Senate votes to protect tax credits for working families
As we’ve been discussing for the past couple moths, a number of tax provisions are set to expire at the end of the year – the Bush tax cuts of 2001 and 2003, as well as various improvements to the Earned Income and Child Tax Credits. President’s proposed budget renews all the tax cuts on income less than $250,000 and extends the EITC/CTC improvements, and last week the Senate voted summary of that bill here.)
However, the parallel bill in the House, as well as a G.O.P. package voted down in the Senate last week by a fast-tracks the bill, effectively exempting it from Congressional “pay-as-you-go” rules. This means they wouldn’t have to tell how much the tax package costs or whether it contributes to deficit reduction before passing it. As we know, tax cuts have had a huge part to play in the deficit.
The House expects to vote on this bill sometime this week, before the August recess.
As the Institute on Taxation and Economic Policy estimates, allowing the 2009 EITC and CTC improvements to expire would raise taxes on 13.1 million working families with 25.7 million children, virtually all of whom are trying to support their children on less than $50,000 a year. Meanwhile, continuing the current rules on the estate tax would provide more than $100 billion in tax windfalls to the largest three out of 1,000 estates – costing the federal government over $430 billion over the next ten years. In other words, the same elected officials that vote for painful cuts to programs that work would raise taxes on the lowest-income earners in order to fund the extension of massive breaks for our country’s wealthiest.
Does this sound incongruous to anyone else? How do they think they can get away with this? Some folks argue that the EITC and CTC provisions were meant to be “temporary” (unlike the other tax cuts? Give me a break), even though they make important improvements to both credits. Furthermore, many elected officials and their constituents simply don’t understand the powerful role of the EITC and CTC in supporting families, encouraging work, and creating opportunity.
Which is where RESULTS comes in! RESULTS volunteers stormed the Hill last week to ask their elected officials for a fairer tax code – one that fights poverty and allows low-income working families to keep more of what they earned. While many volunteers have been working hard to educate their members of Congress about these credits over a number of years, some talked to Congressional aides who had never even heard of the credits!
For more info on the expiring provisions and why the EITC and CTC work, see our campaigns overview presentation from last weekend’s conference. For a full analysis of the proposed House tax package, visit the Center on Budget and Policy Priorities’