Tax — Federal
The emerging “tax extenders” package marks a significant step backward on several key issues facing the nation: long-term budget deficits, high levels of poverty (especially among children), and widening inequality.
It would permanently enlarge budget deficits — and, by so doing, increase pressures to cut domestic programs more deeply — while favoring large corporations and leaving out millions of families that work for low or modest wages.
Letting Key Provisions of Working-Family Tax Credits Expire Would Push 16 Million People Into or Deeper Into Poverty
More than 16 million people in low- and modest-income working families, including 8 million children, would fall into — or deeper into — poverty in 2018 if policymakers fail to make permanent key provisions of two important tax credits.
Some 50 million Americans, including 31 million children, would lose part or all of their Child Tax Credit (CTC) or Earned Income Tax Credit (EITC).
- Interactive Graphic: What Would Congress’s Inaction Cost Working Families?
- State Fact Sheets: The Earned Income and Child Tax Credits
The income tax on individuals and the payroll tax, which is deducted from workers’ wages and used to help finance Social Security and Medicare, each made up about 40 percent of federal revenues in 2010. The federal government also collects revenue from corporate taxes, excise taxes, and other sources.
The Center analyzes major tax proposals, examining their likely effects on the economy and on the government’s ability to address critical national needs, especially over the long term. We place particular emphasis on the effects of tax proposals on households at different income levels. In addition, we analyze trends in the level of federal revenues, income distribution, and tax burdens.
November 25, 2014
November 24, 2014
Updated November 20, 2014
Updated November 17, 2014
Updated November 13, 2014
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