Lawmakers have passed laws in 22 states that either immediately or soon will greatly restrict women’s rights to decide whether and when to have children. These states have some of the worst tax, spending and labor market policies for families in the U.S.
Tax Credits for Workers and Families
State and local tax policies can often make it more difficult for low- and moderate-income individuals and families to make ends meet. Through the use of a variety of targeted tax credits, state lawmakers can help improve both the fairness of their tax systems as well as the standard of living for low- and moderate-income residents. ITEP resources on tax credits for workers and families provide general and state-specific information about the mechanics of these credits and options for reform including state Earned Income Tax Credits, property tax circuit breakers and child-related tax credits.
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July 13, 2022 Abortion-Restricting States Do Least for Children
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brief October 21, 2021 Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2021
The EITC benefits low-income people of all races and ethnicities. But it is particularly impactful in historically excluded Black and Hispanic communities where discrimination in the labor market, inequitable educational systems, and countless other inequities have relegated a disproportionate share of people to low-wage jobs.
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blog September 14, 2021 New Census Data Highlight Need for Permanent Child Tax Credit Expansion
The status quo was a choice, but the Census data released today shows that different policy choices can create drastically different outcomes for children and families. It is time for our state and federal legislators to put people first when it comes to recovery.
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blog July 23, 2021 DC Exemplifies Trend of Tax Justice Victories on the Ground Despite Distractions in the Sky
This month, we watched billionaire space-racers with skyrocketing fortunes literally rocket themselves into the sky to look down on us from the largest gap they could put between themselves and… -
July 7, 2021 The Child Tax Credit in Practice: What We Know About the Payoffs of Payments (Webinar)
Join us for a discussion on why tax credits like the Child Tax Credit (CTC) expansion are good economic policy. You’ll hear from anti-poverty experts on why Congress should extend the policy beyond 2021 and what we can learn from an initiative providing low-income mothers in Jackson, Miss., $1,000 cash on a monthly basis, no strings attached. From theory to practice and what it means for American families, this CTC webinar will provide a unique angle through which to view this transformative policy.
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blog June 28, 2021 State-Level EITC Victories in 2021
A growing group of state lawmakers are recognizing the extent to which low- and middle-income Americans are struggling and the ways in which their state and local tax systems can do more to ensure the economic security of their residents over the long run. To that end, lawmakers across the country have made strides in enacting, increasing, or expanding tax credits that benefit low- and middle-income families. Here is a summary of those changes and a celebration of those successes.
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blog May 13, 2021 Nearly 20 Million Will Benefit if Congress Makes the EITC Enhancement Permanent
Overall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars.
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blog April 21, 2021 An EITC to Lift Up Young Workers
Young workers are confronting a harsh economic reality filled with student loan debt and far too few good-paying jobs. The pandemic reinforced this group’s long history of not receiving proper benefits, such as health insurance, from their employers. They also are often overlooked when it comes to policies that promote economic wellbeing. The federal Earned Income Tax Credit (EITC), for example, is a glowing success story. It lifted 5.8 million people out of poverty in 2018, including 3 million children. But a key shortcoming of the federal EITC: working adults without children in the home receive little to no benefit.
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blog February 16, 2021 EITC Enhancements for States to Consider in 2021
While the federal EITC provides a great deal of support for families with children, its impact is limited for those without children or who are not raising children in their homes. Childless workers under 25 and over 64 have for far too long received no benefit from the federal credit. And workers aged 25 to 64 have received very little value from the existing credit (the maximum credit is much smaller and the income limits more restrictive). The federal EITC’s meager benefits for just some childless adults lead to an inequitable outcome: the federal income tax system—which is ostensibly based on ability-to-pay—taxes some impoverished, childless adults deeper into poverty.
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blog February 2, 2021 Immediate Action State Lawmakers Can Take to Support Families and Children
If Congress does act and enact President Biden’s CTC expansion, states could simply couple to that federal change. The changes, while temporary, could become the foundation of a permanent state-level credit over the long-term. But state lawmakers need not wait for legislative action in DC. They can take immediate steps to ensure that their state’s most vulnerable children are positioned to succeed.
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blog September 15, 2020 The Vital Role of Public Programs in Moving People and Families Out of Poverty
More families across our nation are struggling to meet their most basic needs. High unemployment, the struggle to put enough food on the table, and an inability to make rent or mortgage payments are widespread. Absent federal intervention, outcomes would have been worse. Over the past few months, federal and state relief measures have mitigated hardship. By putting cash in the hands of those who need it most, lawmakers were able to stabilize some families’ budgets and prop up our fragile economy. With time we will surely glean many lessons from 2020. But the sheer power of targeted assistance is already apparent.
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brief September 15, 2020 Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2020
The Earned Income Tax Credit (EITC) is a policy designed to bolster the incomes of low-wage workers and offset some of the taxes they pay, providing the opportunity for families struggling to afford the high cost of living to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been amplified as many states have enacted and expanded their own credits.
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blog April 1, 2020 Adding Flexibility to Make the EITC Work During the Pandemic
Temporarily modifying the structure of the EITC to reflect the realities of our current economy could provide a vital lifeline to low-income workers who have seen their incomes disappear during this crisis. What follows are a few such ideas which could be implemented at either the federal or state levels, or both.
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report February 18, 2020 Expanding State EITCs: Age Enhancements and a Credit Increase for Workers without Children in the Home
For 45 years, the federal Earned Income Tax Credit (EITC) has benefited low- and moderate-income workers. Yet, throughout its history, the EITC has provided little or no benefit to workers without children in the home—a group that includes noncustodial parents whose children live the majority of the year with another parent.
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blog September 26, 2019 Maine Reaches Tax Fairness Milestone
Lawmakers in Maine this year took bold steps toward making the state’s tax system fairer. Their actions demonstrate that political will can dramatically alter state tax policy landscape to improve economic well-being for low-income families while also ensuring the wealthy pay a fairer share.
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report September 26, 2019 State Tax Codes as Poverty Fighting Tools: 2019 Update on Four Key Policies in All 50 States
This report presents a comprehensive overview of anti-poverty tax policies, surveys tax policy decisions made in the states in 2019 and offers recommendations that every state should consider to help families rise out of poverty. States can jump start their anti-poverty efforts by enacting one or more of four proven and effective tax strategies to reduce the share of taxes paid by low- and moderate-income families: state Earned Income Tax Credits, property tax circuit breakers, targeted low-income credits, and child-related tax credits.
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brief September 26, 2019 Reducing the Cost of Child Care Through State Tax Codes in 2019
The high cost of quality child care is a budget constraint for many working families and particularly daunting for parents who are working but earning low wages. Most families with children need one or more incomes to make ends meet which means child care expenses are an increasingly unavoidable and unaffordable expense. This policy brief examines state tax policy tools that can be used to make child care more affordable: a dependent care tax credit modeled after the federal program and a deduction for child care expenses.
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brief September 26, 2019 Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2019
The Earned Income Tax Credit (EITC) is a policy designed to bolster the incomes of low-wage workers and offset some of the taxes they pay, providing the opportunity for families struggling to afford the high cost of living to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states have enacted and later expanded their own credits.
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report September 12, 2019 Promoting Greater Economic Security Through A Chicago Earned Income Tax Credit: Analyses of Six Policy Design Options
A new report reveals that a city-level, Chicago Earned Income Tax Credit would boost the economic security of 546,000 to 1 million of the city’s working families. ITEP produced a cost and distributional analysis of six EITC policy designs, which outlines the average after-tax income boost for families at varying income levels. The most generous policy option would increase after-tax income for more than 1 million working families with an
average benefit, depending on income, ranging from $898 to $1,426 per year. -
blog July 18, 2019 Many States Move Toward Higher Taxes on the Rich; Lower Taxes on Poor People
Several states this year proposed or enacted tax policies that would require high-income households and/or businesses to pay more in taxes. After years of policymaking that slashed taxes for wealthy households and deprived states of revenue to adequately fund public services, this is a necessary and welcome reversal.
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report April 17, 2019 The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis
As of 2017, 11.5 million children in the United States were living in poverty. A national, fully-refundable Child Tax Credit (CTC) would effectively address persistently high child poverty rates at the national and state levels. The federal CTC in its current form falls short of achieving this goal due to its earnings requirement and lack of full refundability. Fortunately, states have options to make state-level improvements in the absence of federal policy change. A state-level CTC is a tool that states can employ to remedy inequalities created by the current structure of the federal CTC. State-level CTCs would significantly reduce child poverty and deep poverty in all states while also addressing racial inequities that the current system has exacerbated. This report examines the poverty impacts, costs and beneficiaries of two options for a state-level CTC.
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blog September 20, 2018 State Tax Codes Can Help Mitigate Poverty and Impact of Federal Tax Cuts on Low- and Middle-Income Families
The national poverty rate declined by 0.4 percentage points to 12.3 percent in 2017. According to the U.S. Census, this was not a statistically significant change from the previous year.… -
report September 17, 2018 State Tax Codes as Poverty Fighting Tools: 2018 Update on Four Key Policies in All 50 States
This report presents a comprehensive overview of anti-poverty tax policies, surveys tax policy decisions made in the states in 2018, and offers recommendations that every state should consider to help families rise out of poverty. States can jumpstart their anti-poverty efforts by enacting one or more of four proven and effective tax strategies to reduce the share of taxes paid by low- and moderate-income families: state Earned Income Tax Credits, property tax circuit breakers, targeted low-income credits, and child-related tax credits.
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brief September 17, 2018 Rewarding Work Through State Earned Income Tax Credits in 2018
The Earned Income Tax Credit (EITC) is a policy designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, providing the opportunity for struggling families to step up and out of poverty toward meaningful economic security. The federal EITC has kept millions of Americans out of poverty since its enactment in the mid-1970s. Over the past several decades, the effectiveness of the EITC has been magnified as many states have enacted and later expanded their own credits. The effectiveness of the EITC as an anti-poverty policy can be increased by expanding the credit at both the federal and state levels. To this end, this policy brief provides an overview of the federal and state EITCs and highlights recent trends to strengthen these credits.
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brief September 17, 2018 Reducing the Cost of Child Care Through State Tax Codes in 2018
Families in poverty contribute over 30 percent of their income to child care compared to about 6 percent for families at or above 200 percent of poverty. Most families with children need one or more incomes to make ends meet which means child care expenses are an increasingly unavoidable and unaffordable expense. This policy brief examines state tax policy tools that can be used to make child care more affordable: a dependent care tax credit modeled after the federal program and a deduction for child care expenses.