As we’ve explained, the new budget plans from House and Senate Budget Committee Chairmen Tom Price and Mike Enzi would impose deep cuts in programs for low- and moderate-income Americans, exacerbating poverty and inequality. One way they would worsen poverty is by allowing crucial provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for low- and modest-income working people to expire at the end of 2017. That would push more than 16 million people, including almost 8 million children, into or deeper into poverty (see chart).
In 2009, policymakers reduced the earnings needed to qualify for a partial CTC, thereby expanding the credit for millions of low-income working families and making other families newly eligible for a partial credit. They also raised the income level at which the EITC begins to phase down for married couples to reduce the marriage penalty some two-earner families face in the EITC. And they boosted the EITC for families with more than two children to help them cover their higher living costs.
If Congress allows these provisions to expire, millions of low-income working families would lose all or part of their EITC and CTC. For example:
These provisions are too important to ignore. Making them permanent would promote work, reduce poverty, and support children’s development.