A gift that truly keeps on giving

Added December 23rd, 2015 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

Happy holidays! It’s in this giving season that I truly appreciate people who think about and provide for those who are less fortunate than others. One of my main policy wish list items to do just that was delivered last week. Congress approved and President Barack Obama signed legislation that permanently extended key tax provisions that help millions of Americans struggling to make ends meet while working at low wages.

In 2008 and 2009, important expansions of the federal Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) were enacted: a larger EITC for families raising three or more children; a reduction in the EITC “marriage penalty” that some two-earner families face; and a lower CTC earnings exclusion that expands the credit to very low-income working families. These provisions were set to expire at the end of 2017 if no further action was taken, and the League has spent a good part of the last year working to make sure this did not happen.

giftThese provisions are crucial to many Michigan residents and to Americans nationwide. If these provisions had expired 50 million Americans, including 25 million children, would have lost all or part of their credits. Right here in Michigan, that meant 727,000 children in 415,000 families would have lost all or part of their EITC or CTC. Without this bill’s passage, 16 million Americans would have been pushed into, or deeper into, poverty, including 357,000 in Michigan—nearly half of them children.

A single parent with two children working at Michigan’s minimum wage—$18,500 per year—would have lost $1,415 of his or her $2,000 Child Tax Credit. And a married couple with three children earning $35,000 would have seen their EITC shrink by $1,190. The EITC and CTC do not discriminate. They are claimed by young workers just starting out, single parents, veterans, urban and rural households, and workers in nearly all industries and occupations.

This permanent extension has long-lasting benefits on our communities. These tax credits encourage work, help lift families out of poverty, and improve the lives of children. Additionally, research shows children in families that benefit from the EITC and CTC are healthier, do better in school, are more likely to go to college, and earn more as adults. And local economies will continue to benefit from these strengthened credits, as working families often take their credits and spend them in their communities on basic necessities, such as household items, transportation to and from work, child care and clothing.

The bill could have done more for workers without children, and we will keep working on this. Childless workers are the sole group of people that are still taxed into, or deeper into, poverty by our federal tax code. President Obama and Speaker Paul Ryan have had similar proposals that would have plugged the gap in the EITC for these workers, and addressing this should be a top priority in the year ahead.

As I think about ways we can help our fellow man and woman this time of year, I am very thankful that these provisions were permanently extended. A special thanks goes to Michigan Senators Gary Peters and Debbie Stabenow for their leadership on this very important issue. As 2015 comes to a close, I look forward to spending time with my family and resting up to take on whatever policy fights 2016 brings our way.

2 Responses to “A gift that truly keeps on giving”

  1. Timothy Thompson says:

    Thanks for your hard work on this important issue. Keep fighting the good fight!

  2. […] the greatest accomplishment for 2015, both in its impact and its longevity, is Congress’ permanent—yes, permanent—extension of important provisions of the federal Earned Inc…. Without this bill’s passage, 16 million Americans would have been pushed into, or deeper into, […]

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