Working Families Tax Relief Act
from Center on Budget and Policy Priorities:
It is time we fix our tax laws to give working people and children a fair shot to get ahead. An exciting new proposal from Senators Sherrod Brown (OH), Michael Bennet (CO), Dick Durbin (IL), and Ron Wyden (OR) would take a big step in that direction—and we need your help to amplify this legislation.
The Working Families Tax Relief Act (S. 1138), by Senators Brown, Bennet, Durbin, and Wyden, would substantially expand both the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), boosting the economic security of 46 million households. These credits are proven policy successes that help working people with low-wage jobs keep their heads above water, reduce poverty, and improve children’s opportunities. But they can do considerably more. The EITC and CTC expansions in this bill—in combination with legislation to raise the minimum wage, provide paid family and medical leave, and more— would help address income inequality that has affected white, Black, and brown working-class households.
Specifically, the bill would:
- Increase the EITC for families with children by roughly 25 percent
- Substantially increase the EITC for workers not raising children and lower the eligibility age to 19
- Make the full $2,000 CTC available to all low- and moderate-income families;
- Create a new Young Child Tax Credit that would provide families with children under 6 years old an extra $1,000 per child (for a total of $3,000 per child)
- Make the CTC equally accessible to families in Puerto Rico while also expanding Puerto Rico’s EITC
Altogether, these improvements to the EITC and CTC would boost the financial security of 46 million households and 114 million people, including 8 million Black families, 9 million Latinx families, and 2 million Asian American families. The bill would also cut child poverty nationally by 28 percent, lifting 3.1 million children out of poverty and making another 7.7 million children less poor.
While there are some other good proposals to expand the EITC and the CTC, the Working Families Tax Relief Act is the only legislation that includes key policy improvements in both the EITC and CTC.
Further reading
- To learn more about the Working Families Tax Relief Act, including how it would affect people in your state, read CBPP’s analysis of the legislation.
- To learn more about the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) in general, read CBPP’s Policy Basics on the EITC and CTC and this blog post on 5 ways the EITC benefits families, communities, and the country.
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