Ed Davis and Jennifer Thacker: Earned income Tax Credit Provides Work Incentive
Charleston Gazette-Mail - EITC gives working families a hand up, not a hand out Read
The U.S. Census Bureau has released annual figures on poverty in America, and once again West Virginia has one of the nation’s highest rates of poverty in the country.
One quarter of West Virginia children live in poverty, a number that’s been too high for too long. Over 300,000 West Virginians lived in poverty in 2014, struggling to afford basic necessities and trying to live on less than $24,000 a year for a family of four.
Despite these sobering figures, the new data do hold a bright spot: the Earned Income Tax Credit (EITC) and Child Credit (CTC) are helping to reduce poverty for thousands of hardworking West Virginia families. These critical tax credits let families keep more of what they earn so that they can make ends meet and pay for things that allow them to stay in their jobs, such as child care and transportation.
Our organizations provide free tax assistance to thousands of West Virginians each year, and our staff members see first-hand just how important these tax credits are for working families who are struggling to stretch their dollars and pay for the basics like food and gas.
Even so, essential parts of the EITC and CTC will expire in 2017 if Congress doesn’t act. Congress has an important chance when considering tax legislation this fall to prevent the clock from running out on these provisions that make the EITC and CTC more effective and help the credits reach more working families.
For decades, these credits have been a pro-work success story in the fight against poverty, and the continued and unacceptable level of poverty in our state underscores the need to keep them intact.
We cannot afford to go backward. If Congress fails to save expiring EITC and CTC provisions, 40,000 people in West Virginia working families — including 18,000 children — will fall into, or deeper, into poverty.
They can also close a glaring hole in the EITC that leaves behind millions of workers because of their age or because they do not have kids. The new Census data show that nationally 1.1 million childless workers worked full time year round in 2014 but were officially in poverty. This figure (which covers adults ages 18 to 64 not living with any related children under 18) was up 35 percent since 2000.
Making the EITC more adequate for childless workers and increasing access to the credit among young workers who are just starting out — as both Republican tax leader Paul Ryan and President Obama have proposed to do — would encourage and reward work, increase employment, and reduce poverty.
The U.S. House of Representatives is already considering legislation that would make permanent some expiring business tax provisions with no mention of doing the same for the EITC and CTC provisions that help hardworking low-income families or childless workers struggling to get by.
It is up to West Virginia’s lawmakers in the U.S. House and Senate to ensure that the final legislation under consideration includes permanent extension of the expiring EITC and CTC provisions.
We call on West Virginia’s representatives in the U.S. House and Senators Manchin and Capito to remember that the EITC and CTC are powerful pro-work tools proven to fight poverty. It’s time to give working families a hand up, not a push back into poverty.
Ed Davis is with the United Way of the River Cities’ Financial Stability Partnership in Huntington. Jennifer Thacker is with the West Virginia Alliance for Sustainable Families in Charleston.