Source: GoErie.com
By Bill Jackson
February 25, 2017
Hardworking and proud are two words that come to mind when I think about America's workforce. Workers who aspire to share in the "American dream." These are everyday people — our friends and neighbors — who, despite their best efforts, live a life of poverty simply because they do not earn enough.
Single mothers and fathers holding down a job and raising children, childless workers, and those working multiple low-paying jobs are examples of lower-income earners who often have no personal safety net to protect them from financial crisis.
For those living paycheck to paycheck, it only takes an unforeseen illness, a temporary job layoff or a critical home or car repair to fall further into poverty. For them, the American dream belongs to someone else.
Since its inception 40 years ago, the earned income tax credit has been this country's most successful anti-poverty program. By design, the EITC is a cash credit that eases the hardship on lower-wage workers by compensating for some of the payroll and income taxes deducted from their paychecks.
In 2015, more than 900,000 eligible Pennsylvania workers received an average EITC refund of $2,271. In Erie County, about 25,000 working men and women, including grandparents raising grandchildren, fathers working two or three part-time, minimum-wage jobs, received an average of $2,330. The EITC enables them to take care of basic needs and keep their families stable. For others, the EITC is the "extra cash needed" to move a step closer to reaching a long-term goal, such as starting an emergency fund or making much-needed home repairs.
The EITC is joined by a second proven poverty-reducing tool, the child tax credit. The CTC helps eligible lower-income families offset some of the cost of raising their children by reducing their tax bill. In 2015, the child tax credit lifted approximately 2.8 million people out of poverty, including an estimated 1.6 million children. The additional child tax credit, a refundable portion of the CTC, helps working parents earning wages so low that they do not even qualify to pay federal income taxes. In 2015, ACTC claimants in Erie County received a refund averaging $1,220.
Research has linked the EITC and CTC to positive effects on the lives of those who receive them.
Family stress often decreases, maternal and infant health improve, elementary and middle school academic performance improves, and high school graduates become more likely to go to college. Collectively, these factors lay a strong foundation for changing community conditions for the better.
For these reasons, proposals to extend EITC and CTC eligibility to those who are currently excluded or receive minimal benefit have garnered strong nonpartisan support from policymakers. Currently, one group excluded from receiving EITC benefits is childless wage earners under the age of 25, including noncustodial parents who contribute to the cost of raising their children. Expanding the child tax credit will help working families with the lowest incomes to benefit more fully from the credit and gradually improve quality of life for themselves and their children.
The United Way of Erie County, with the generous support of the Erie Community Foundation, provides low- to moderate-income residents in Erie County with free tax preparation through the Erie Free Taxes program. It is part of the nation's Volunteer Income Tax Assistance program (VITA) responsible for helping eligible tax filers claim the EITC and CTC. Management of the VITA/Erie Free Taxes program has allowed the United Way of Erie County to see firsthand how important these credits are to our local communities.
We urge U.S. Sens. Bob Casey and Pat Toomey and U.S. Reps. Mike Kelly and Glenn Thompson to work tirelessly to lower the eligibility age for the earned income tax credit, expand EITC eligibility to noncustodial working parents who share in the cost of raising their children, and improve the child tax credit. These efforts will ensure that our lowest-income workers have access to the full amount of the credits and move one step closer to realizing the American dream.
Bill Jackson is president of the United Way of Erie County.