For the first time this spring, millions of low-income workers without children are getting bigger tax refunds than ever before thanks to the expansion of the Earned Income Tax Credit (EITC), enacted by the historic plan American rescue. But unfortunately, this is only temporary.
For a year, the US bailout has updated the EITC, increasing the number of workers it is able to reach, tripling the maximum benefit to make it more impactful, as well as raising the earnings cap to include workers earning just over $10 per hour. in a full-time job.
And now, just when workers need the most support to deal with soaring costs, the Senate is reluctant to extend the expanded EITC.
While lawmakers have called for a permanent extension of the Child Tax Credit (CTC) expansion to help working families, policymakers seem to have largely forgotten about low-income workers who are only now seeing the benefits of the expanded EITC. President Biden’s budget proposal for fiscal year 2023 mentions the CTC several times, but includes only one mention of the EITC.
The increase in CTC and advance payments has provided stability, lifted millions of children out of poverty, and helped families get food on the table, a roof over their heads, and s take care of their children. And advocates and policymakers are rightly fighting to renew the expansion and bring some stability back to the lives of families with children.
But we must not forget our hardworking neighbours. In many ways, expanding the EITC would simply fix a tax code that was broken for low-to-moderate income workers with no children at home.
Before the US bailout, the EITC excluded all workers under 25 and over 64. For those who were eligible, the maximum credit, just $529, was so low it didn’t fully offset income tax, leaving millions of hard-working people. people taxed in poverty at the end of the year.
This temporary expansion boosted the incomes of 17 million childless workers this tax-filing season, 5 million of whom would be pushed into after-tax poverty without this temporary expansion.
Congress must permanently extend these changes to the EITC. This would help young and older adult workers to make ends meet and lift millions of people out of poverty when they enter the labor market. It would also reward labor market participation for childless workers overall and prevent hard workers from being taxed into poverty.
It’s not just good policy, it’s the right thing to do. No one in America should be forced into poverty because of the taxes they pay.
For too long, our country has been one of haves and have-nots. One of the working class people producing our nation’s abundance while having little or nothing to show for themselves, their families and their communities. If we want a full and fair economic recovery for those who need it most, providing much-needed help to low-income working people without children is a key priority — a priority we are all behind on.
If now isn’t the right time to take a giant leap toward lifting every person in America out of poverty, when is?
Jessica Fulton is vice president of policy at the Joint Center for Policy and Economic Studies and author of the recently released policy brief, “Improving the working income tax credit for black workers without children.”