Today, April 15th, is tax day. As a society, we rely on taxes to maintain infrastructure and services we largely take for granted: public education, the roads and bridges we drive on, the water we drink, the health inspectors who ensure our food is safe, and the first responders who answer the call when there is an emergency. All of these rely on tax revenues that we are proud to pay.
In addition to providing for the general welfare of society, the tax code can also be used to alleviate poverty. Every year during tax season, almost 30 million Americans get a boost in income from the federal Earned Income Tax Credit (EITC), the federal Child Tax Credit (CTC), or both.
The EITC and CTC work together to reduce child poverty, pulling 5 million kids out of poverty every year. Research shows that this translates into big lifetime benefits, including improved health and education outcomes, higher earnings later in life, and even longer life expectancy.
Despite these successes, there is a lot of room to improve both programs. The current CTC excludes the families with the greatest need for it, those with very low income. And workers without children, or workers below the age of 25 or above the age of 65, receive little to no tax benefits from the EITC.
One plan to build on and expand the success of these two tax credits is the Working Families Tax Relief legislation. This plan would provide more EITC benefits to childless workers AND would increase the amount of CTC benefits that go to the lowest-income taxpayers.
To learn more about the EITC and the CTC click here. For more information on the Working Families Tax Relief plan, click here.