September 3, 2015
Honoring Their Hard Work
On Labor Day, we celebrate the contributions of working men and women to making the United States a great country. For many of them, work means putting in long hours and still having to struggle to make ends meet. Worse, some may be losing important support if Congress does not act soon.
At issue are two important forms of assistance to hardworking people. The Earned Income Tax Credit and the Child Tax Credit help families by reducing taxes for those who are working but struggle to afford basic necessities.
Because the credits help them pay less in taxes, families are able to keep more of their wages to pay for the basics like food, utilities, or childcare expenses. Many use their EITC to pay for a needed car repair so they can get to work or college tuition to further their education and get ahead.
Low-wage families typically spend any increase in earnings at local businesses, making these credits good for the local economy, too.
But key components of the EITC and the CTC are scheduled to expire for thousands of working families in Virginia by 2017. One such provision enables a family with more than two kids to get a larger credit because more kids means more expenses. Another one lets families qualify for a small CTC at just $3,000 in annual earnings. If these key provisions are allowed to expire, a larger family will no longer get additional assistance, and a family would need to make $14,600 a year to get even a little help from the CTC. That means that a family with more than two children will see its EITC drop by as much as $700, and a mom with two kids working full time at minimum-wage will lose about $1,725 from the CTC. That’s a lot of money for a family on a very tight budget.
The families who will lose out if Congress does nothing are those who help our economy move forward and make Virginia a better place to live and work – including 15,400 teachers and other education professionals, 33,900 construction workers who build our roads and bridges, and 29,800 nurses, home health aides, and others working in the healthcare industry.
Members of Congress have been talking about making tax credits that help businesses permanent. As we approach Labor Day, Virginia’s elected officials should also be discussing ways to help our hardworking families.
Strengthening the EITC and CTC instead of reducing them is an excellent way to honor their hard work.
–Jeff Connor-Naylor, Program Director