With Tax Day come and gone, millions of working American families are reassessing their budget priorities and thinking about how to cut expenses. Fortunately, an improving economy holds promise for some. However, for millions of hardworking taxpayers, the improving economy has still not reached their pocketbooks. In fact, more than 40 percent of Latinos earn poverty-level wages despite their hard work and immense contributions to the U.S. economy.
Given this outlook, it’s a wonder that any elected officials would turn their backs on successful tax policies that have lifted millions of working families out of poverty. The refundable Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) have long received bipartisan praise and have been heralded as a resounding success. President Ford created the EITC and President Reagan expanded it, calling it “the best antipoverty, the best pro-family, the best job creation measure ever to come out of Congress.” President Clinton created the CTC and President George W. Bush increased it.
Together, these two tax credits have a positive track record worthy of boasting from both parties. The EITC and CTC both promote employment, as only people who work are eligible. There is evidence that the EITC was a major impetus in reducing single mothers’ unemployment in the 1990s. The EITC and CTC are also refundable, meaning that very low-income families can still earn a partial credit. After Congress expanded the CTC in 2009 to reach families making as little as $3,000 a year, 1.1 million people were lifted above the poverty line in 2013. Because of enhancements to the EITC that same year, 600,000 were put out of poverty in 2013. Plus, numerous studies have drawn links between the CTC and higher test scores, higher graduation rates, and higher college attendance.
Yet, some members of Congress want to let vital enhancements to these credits expire at the end of 2017. If that happens, more than 16 million American workers with eight million children would fall into or even further into poverty. Latinos stand to lose the most from the expiration of these enhancements. Some four million Latino working families with nine million children could each lose an average of more than $900 a year. While $900 may not sound like much, to the average Latino working family, that can mean the difference between paying rent and not.
Congress still has an opportunity to recognize the success of the refundable CTC and EITC and to come together to renew its promise to ensure that with hard work, families can stay out of poverty and sow the seeds for lifelong success. Given the stakes for the Latino community, policymakers can be sure that we will be holding them accountable for doing what’s right for working families.