Tax Credits for Workers and Families
Adding Flexibility to Make the EITC Work During the Pandemic
• By Aidan Davis
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.
States Can Lead on Making the EITC Benefit More Young and Older Workers
• By Aidan Davis
The federal Earned Income Tax Credit (or EITC) lifts millions out of poverty each year, but it is not created equal for everyone. Childless workers under 25 and over 64 receive no benefit from the existing federal credit. In the absence of immediate federal action, states have led–and continue to lead–the way.
Trends We’re Watching in 2020
• By ITEP Staff
State lawmakers have plenty to keep them busy on the tax policy front in 2020. Encouraging trends we’re watching this year include opportunities to enact and enhance refundable tax credits and increase the tax contributions of high-income households, each of which would improve tax equity and help to reduce income inequality.
Maine Reaches Tax Fairness Milestone
• By Guest Blogger
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.
State Tax Codes as Poverty Fighting Tools: 2019 Update on Four Key Policies in All 50 States
• By Aidan Davis
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,…
Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2019
• By Aidan Davis
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…
Julián Castro Provides the Latest Proposal to Expand Refundable Tax Credits
• By Steve Wamhoff
New estimates from ITEP show that Julián Castro’s refundable tax credit proposal would mostly benefit the bottom 60 percent of households and would have a cost ($195 billion in 2020) that places it roughly in the middle of the different tax credit proposals that Democrats have offered over the past several months.
New Report: A Chicago EITC Would Benefit up to 1 Million Chicago Families
• By Lisa Christensen Gee
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 of 546,000 to 1 million of the city’s working families, the Institute on Taxation and Economic Policy (ITEP) and Economic Security for Illinois said today. […]
Promoting Greater Economic Security Through A Chicago Earned Income Tax Credit: Analyses of Six Policy Design Options
• By Lisa Christensen Gee
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,…
Census Numbers Show the Power of the Tax Code to Direct Resources to Low-Income Families
• By Jessica Schieder
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.
How Tax Policy Can Help Mitigate Poverty, Address Income Inequality
• By ITEP Staff
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.
Major Federal Tax Credit Proposals
• By ITEP Staff
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.
Election 2020: Tax Policy Essentials
• By ITEP Staff
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.
BOOST Act
• By ITEP Staff
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.
What to Watch for on Tax Policy During the Presidential Primary
• By Steve Wamhoff
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.
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
• By Steve Wamhoff
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.
Understanding Five Major Federal Tax Credit Proposals
• By ITEP Staff
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.
Cost-of-Living Refund Act
• By ITEP Staff
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.
American Family Act
• By Jessica Schieder, Meg Wiehe, Steve Wamhoff
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.
Working Families Tax Relief Act
• By Jessica Schieder, Meg Wiehe, Steve Wamhoff
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.
LIFT the Middle Class Act
• By Jessica Schieder, Meg Wiehe, Steve Wamhoff
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.
Rise Credit
• By Jessica Schieder, Meg Wiehe, Steve Wamhoff
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.
The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis
• By Aidan Davis, Meg Wiehe
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…
The Working Families Tax Relief Act Would Boost Incomes and Economic Security for Workers and Children
• By Steve Wamhoff
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.
Federal Tax Cuts in the Bush, Obama, and Trump Years
• By Steve Wamhoff
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.
