April 2013 U.S. Poverty Action

Tax Credits Are Vital to Low-Income Working Families

Write Members of Congress Urging Them to Protect EITC and CTC in Tax Reform

1. Tell your member of Congress that you support policies that help low-income families go to work and raise their children.
2. Remind them that the Earned Income Tax Credit and Child Tax Credit make work pay and promote personal responsibility; only families who are employed can get these credits.
3. The EITC and CTC benefit parents who work as firefighters, police and sheriffs, nurses, child care workers, and military personnel.
4. Tell them that parents who work full-time should be able to support their families and stay out of poverty. In 2011, the EITC and CTC lifted 9.4 million people out of poverty, more than half of them children.
5. Explain that you are pleased that recent improvements to the EITC and CTC were extended for five years in the “fiscal cliff” deal. However, Congress needs to make these improvements permanent like the other tax provisions in that deal. In addition, tell them you’re concerned that Congress might target the EITC and CTC for cuts in deficit reduction and/or tax reform.
6. Ask your members of Congress to speak to House Ways and Means Chairman Dave Camp (R-MI-4) and Ranking Member Sander Levin (D-MI-12) or Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) and urge them to:

• Make the 2009 improvements to the EITC and CTC permanent
• Specifically protect the EITC and CTC from cuts in deficit reduction or tax reform

Note: To find contact information for members of Congress, including telephone numbers, addresses, and the name of the aide who handles tax policy, visit our Elected Officials page (http://capwiz.com/results/dbq/officials/). We encourage you to follow up your letter with a phone call to the aide to discuss it. For directory assistance, you can also contact the U.S. Capitol Switchboard at (202) 224-3121.

Low-income Tax Credits Support Families and Reduce Poverty

The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) help working families make ends meet. By providing a tax credit for families with earned income, they encourage work — even in jobs that pay too little to live on. The EITC and CTC also reduce poverty. The Center on Budget and Policy Priorities (CBPP) estimates that in 2011, the EITC and CTC lifted 9.4 million people out of poverty, nearly half of them children.

In 2009, the American Recovery and Reinvestment Act (ARRA) expanded the EITC and CTC to help more low-income families. These changes alone lifted 1.5 million people out of poverty in 2011. These improvements were extended until 2017 as part of the “fiscal cliff” deal in January 2013. While this is good, Congress needs to make these improvements permanent like the other tax provisions included that deal.

Threats and Opportunities for EITC and CTC in Tax Reform

Unfortunately, some members of Congress have proposed cutting back or even eliminating the EITC and CTC to help reduce the deficit (while at the same time proposing new tax cuts for the wealthy). Dealing with our long-term debt is an important priority, but it must be done in a balanced and responsible way. All major deficit reduction efforts in the past included specific protections for anti-poverty programs. Congress must continue this tradition by including a principle specifically protecting the EITC and CTC from cuts in any deficit reduction/tax reform framework.

In part to be ready for long-term tax reform as a part of deficit reduction, House Ways and Means Committee Chairman Dave Camp (D-MI-4) and Senate Finance Committee Chairman Max Baucus (D-MT) have both been working on possible tax reform proposals. No details are available and nothing is guaranteed. We need to make sure that Rep. Camp and Sen. Baucus don’t undermine working families in an effort to get any deal possible. After working so hard to protect important gains in using to tax code to reduce poverty, don’t let Congress undo it one fell swoop.