Tax Credits for Workers and Families
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news release September 12, 2019 New Report: A Chicago EITC Would Benefit up to 1 Million Chicago Families
Media contact Report outlines policy options for Chicago Resilient Families Initiative Task Force Recommendations A new report reveals that a city-level, Chicago Earned Income Tax Credit would boost the economic security… -
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 September 10, 2019 Census Numbers Show the Power of the Tax Code to Direct Resources to Low-Income Families
Refundable federal tax credits, including the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), lifted 7.9 million people out of poverty in 2018. This latest analysis from the U.S. Census Bureau demonstrates the power of federal programs to alleviate poverty and help low-income families keep up with the increasing cost of living.
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blog September 10, 2019 How Tax Policy Can Help Mitigate Poverty, Address Income Inequality
Analysts at the Institute on Taxation and Economic Policy have produced multiple recent briefs and reports that provide insight on how current and proposed tax policies affect family economic security and income inequality.
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report September 10, 2019 Major Federal Tax Credit Proposals
In 2019, several federal lawmakers have introduced tax credit proposals to significantly expand existing tax credits or create new ones to benefit low- and moderate-income people. While these proposals vary a great deal and take different approaches, all build off the success of the EITC and CTC and target their benefits to families in the bottom 60 percent of the income distribution who have an annual household income of $70,000 or less.
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brief July 26, 2019 Election 2020: Tax Policy Essentials
The nation’s tax policies and their role in economic inequality are front and center during this election cycle. For those interested in how the nation can move toward a fairer tax system and or more detailed information about progressive tax policy ideas, ITEP created this quick guide.
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report June 25, 2019 BOOST Act
The BOOST Act would provide a new tax credit of up to $3,000 for single people and up to $6,000 for married couples, which would be in addition to existing tax credits. Income limits would prevent well-off households from receiving the credit. Unlike other refundable tax credit proposals, the BOOST Act would not be limited to people with earnings or people with children.
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blog June 25, 2019 What to Watch for on Tax Policy During the Presidential Primary
America needs a new tax code. The Democratic presidential debates beginning this week present an opportunity for candidates to make clear how they would address inequality or to raise enough revenue to make public investments that make the economy work for everyone. Here are some of the big tax issues that we hope they will touch on.
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blog June 20, 2019 UPDATED: New ITEP Data Shows the House Ways and Means Bill to Expand EITC and Child Tax Credit Would Benefit Low- and Moderate-Income People and Families
Today the House Ways and Means Committee is marking up the Economic Mobility Act of 2019, a bill introduced by Chairman Richard Neal to expand some key tax credits to help low- and moderate-income people and families. New data generated with the ITEP microsimulation tax model show how adults and children would benefit nationally and in each state.
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report May 22, 2019 Understanding Five Major Federal Tax Credit Proposals
Federal lawmakers have recently announced at least five proposals to significantly expand existing tax credits or create new ones to benefit low- and moderate-income people. While these proposals vary a great deal and take different approaches, all would primarily benefit taxpayers who received only a small share of benefits from the Tax Cuts and Jobs Act.
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report May 22, 2019 Cost-of-Living Refund Act
The Cost-of-Living Refund Act would expand the Earned Income Tax Credit (EITC) for low- and moderate-income working people. The maximum EITC would nearly double for working families with children. Working people without children would receive an EITC that is nearly six times the size of the small EITC that they are allowed under current law.
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report May 22, 2019 American Family Act
The American Family Act would expand the Child Tax Credit (CTC) for low- and middle-income families. The CTC would increase from $2,000 under current law to $3,000 for each child age six and older and to $3,600 for each child younger than age six. The proposal removes limits on the refundable part of the credit so that low- and moderate-income families with children could receive the entire credit.
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report May 22, 2019 Working Families Tax Relief Act
The Working Families Tax Relief Act would expand the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for low- and middle-income families.
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report May 22, 2019 LIFT the Middle Class Act
The LIFT (Livable Incomes for Families Today) the Middle Class Act would create a new tax credit of up to $3,000 for single people and up to $6,000 for married couples, which would be an addition to existing tax credits. Eligible taxpayers would be allowed a credit equal to the maximum amount or their earnings, whichever is less. Income limits would prevent well-off households from receiving the credit.
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report May 22, 2019 Rise Credit
The Rise Credit would replace the existing EITC. In most cases, the Rise Credit would be $4,000 for single people and $8,000 for married couples. Eligible taxpayers would be allowed a credit equal to the maximum amount or their earnings, whichever is less.
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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 April 10, 2019 The Working Families Tax Relief Act Would Boost Incomes and Economic Security for Workers and Children
Sens. Sherrod Brown, Michael Bennet, Richard Durbin, and Ron Wyden (along with the backing of most of the Democratic caucus in the Senate) today rolled out a new proposal to expand the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). Called the Working Families Tax Relief Act (WFTRA), the proposal would provide a substantial benefit, especially to low-income working families.
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report July 11, 2018 Federal Tax Cuts in the Bush, Obama, and Trump Years
Since 2000, tax cuts have reduced federal revenue by trillions of dollars and disproportionately benefited well-off households. From 2001 through 2018, significant federal tax changes have reduced revenue by $5.1 trillion, with nearly two-thirds of that flowing to the richest fifth of Americans.
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blog March 30, 2018 Teachers’ Strikes Are Emblematic of Larger Tax Challenges for States
As other researchers as well as journalists have noted, teachers striking or threatening to strike over low wages and overall lack of investment isn’t simply a narrative about schools and public workers’ pay. It is illustrative of a broader conflict over tax laws and how states and local jurisdictions fund critical public services that range from K-12 education, public safety, roads and bridges, health care, parks, to higher education.
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blog March 26, 2018 Trends We’re Watching in 2018, Part 3: Improvements to Tax Credits for Workers and Families
This has been a big year for state action on tax credits that support low-and moderate-income workers and families. And this makes sense given the bad hand low- and middle-income families were dealt under the recent Trump-GOP tax law, which provides most of its benefits to high-income households and wealthy investors.
Many proposed changes are part of states’ broader reaction to the impact of the new federal law on state tax systems. Unfortunately, some of those proposals left much to be desired.
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blog January 26, 2018 Federal Tax Law Will Have Mixed Effect on Taxpayers’ State Tax Bills and States’ Revenue
Most states piggyback on federal law to some extent for their own taxes, especially personal and corporate income taxes. These states in particular must understand what the federal changes mean for their own tax codes and decide whether to remain “coupled” to changes in the tax bill, decouple from them or take other action in response.
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blog September 12, 2017 Census Data Shows Importance of Refundable Tax Credits in Reducing Poverty, But Lawmakers Move to Restrict Them
The annual poverty data released by the Census Bureau today continues to show that federal refundable tax credits are the second most important anti-poverty program after Social Security. But this… -
blog May 30, 2017 Avocado Toast, iPhones, Billionairesplaining and the Trump Budget
A couple weeks ago, a billionaire set the Internet ablaze when on 60 Minutes Australia he chided millennials to stop buying avocado toast and fancy coffee if they wanted to… -
blog May 4, 2017 EITC Victories Await in Both Hawaii and Montana
Two states are on the verge of embracing a tried and tested anti-poverty policy, the Earned Income Tax Credit (EITC). In the past two weeks, lawmakers in both Hawaii and… -
brief February 11, 2016 Rewarding Work Through State Earned Income Tax Credits
See the 2016 Updated Brief Here Read the brief in a PDF here. that time, the EITC has been improved to lift and keep more working families out of poverty.…