BEYOND THE NUMBERS
Senate Plan Would Boost Economic Well-Being of Millions of Asian, Pacific Islander Households
May is a month to celebrate the vibrant cultures and rich heritages of the diverse Asian and Pacific Islander American communities, but it’s also important to advance policy proposals to improve their economic well-being. Legislation from Senators Sherrod Brown, Michael Bennet, Dick Durbin, and Ron Wyden (which another 42 senators have co-sponsored) would help 2.3 million Asian and Pacific Islander households by expanding the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).
Known as the Working Families Tax Relief Act, the bill would increase the EITC for families with children by roughly 25 percent. It would also make the CTC fully refundable so children in the poorest households would receive the full credit, and it would create a larger, fully refundable Young Child Tax Credit (YCTC) for children under age 6. A National Academy of Sciences committee charged with recommending ways to reduce child poverty recently noted that stronger income assistance for children is linked with healthier birth weights, better childhood nutrition, higher school enrollment, higher test scores, higher high school graduation rates, less drug and alcohol usage, more positive behavior, and higher rates of college entry. About 1.4 million Asian American and 60,100 Pacific Islander American families with children would benefit from the EITC and CTC expansion.
By substantially increasing the EITC, the bill would also help working Asian and Pacific Islander Americans who aren’t raising dependent children. It would raise the maximum EITC for working childless adults — the lone group the federal tax code now taxes into, or deeper into, poverty — from roughly $530 to $2,070 and raise the income limit to qualify for the credit from about $16,000 for a single individual to about $25,000. It would also expand the age range of eligibility for the tax credit from 25-64 to 19-67. Under this bill, after-tax incomes would rise for about 837,500 Asian American working childless households and 39,200 Pacific Islander American working childless households.
The bill would also have significant anti-poverty impacts for Asian and Pacific Islander Americans. Under the Supplemental Poverty Measure — a more comprehensive metric than the official poverty measure, which counts only cash income — we estimate that the bill would lift about 1.7 million Asian and Pacific Islander Americans above or closer to the poverty line, including about 500,000 children.
The bill would help families and workers across racial and ethnic subgroups of the Asian and Pacific Islander community (see table). These include Asian American and Pacific Islander American communities with large populations: about 431,900 Indian American, 460,600 Chinese American, 341,700 Filipino American, 279,400 Vietnamese American, 26,700 Native Hawaiian, and 22,100 Samoan American households would benefit. They also include subgroups that have relatively smaller populations. For example, the bill would benefit 5,800 Bhutanese American, 7,300 Sri Lankan American, and 5,500 Marshallese American households.
|Asian and Pacific American Households Benefiting From Working Families Tax Relief Act, by Subgroup|
|Subgroup||Number of Households|
|Total Asian and Pacific American||2,315,000|
|Total Asian American||2,215,700|
|Asian Indian alone||431,900|
|Chinese, except Taiwanese, alone||460,600|
|Sri Lankan alone||7,300|
|Other Asian alone||20,200|
|All combinations of Asian races only||44,300|
|Total Native Hawaiian and Other Pacific Islander American||99,300|
|Native Hawaiian alone||26,700|
|Guamanian or Chamorro alone||12,200|
|Other Native Hawaiian and Other Pacific Islander||19,500|
Note: These figures only include households in which the head of household is of Asian or Pacific Islander descent alone and do not include households in which the head of household is of a combination of Asian or Pacific Islander descent and other races or multiracial households in which a household member is of Asian and Pacific Islander descent but the head of households is not.
Source: CBPP estimates based on 2015-2017 American Community Survey data and March 2018 Current Population Survey data.
- El crédito tributario por hijos
- Federal Payroll Taxes
- Federal Tax Expenditures
- Fiscal Stimulus
- Marginal and Average Tax Rates
- Tax Exemptions, Deductions, and Credits
- The Child Tax Credit
- The Earned Income Tax Credit
- The Federal Estate Tax
- Where Do Federal Tax Revenues Come From?
- Where Do Our Federal Tax Dollars Go?