TOLEDO, OH — Today, U.S. Sen. Sherrod Brown (D-OH) visited a volunteer tax preparation site in Toledo as he outlined legislation that would give Ohioans a ‘cost-of-living’ refund to compensate for decades of rising costs and stagnant wages. Brown is announcing his proposal as news reports indicate that Americans are receiving smaller refunds than expected under President Trump’s tax law.
Brown’s bill would:
- Roughly double the Earned Income Tax Credit for working families, increase the credit for childless workers almost sixfold, and make millions more Americans eligible. Roughly 50 million Americans would get anywhere from $3,000 to $12,000 back in their pockets under this provision of the bill.
- For the first time, extend the credit to students and people raising children or caring for ageing parents and other relatives;
- A recent study by AARP and the National Alliance for Caregiving found that almost 40 million Americans are providing unpaid care. A study by GAO found that almost a third of all college students experience food insecurity.
- Allow people to claim an annual $500 advance on the credit, interest free, in order to cover emergency expenses. This provision provides an alternative to predatory, payday lenders.
“All across the country, hard work isn’t paying off like it should. Corporate profits have soared, executive compensation has exploded, but wages are flat. Meanwhile the cost of everything from healthcare to education and housing is up,” said Brown. “We need to put more money back in the pockets of working people and that’s what this bill does.”
Brown was joined at the press conference by Toledoans who have benefitted from the EITC in the past and local advocates from Toledo LISC and United Way of Greater Toledo who work to help Ohioans prepare their taxes and secure the biggest refunds possible. The West Toledo Branch Library is one of the sites where Toledo LISC is offering free tax preparation services.
“As a single mother raising 6 children, with 3 degrees, I worked every day, yet I still found myself struggling financially and having to make hard choices. The really hurt came knowing that I had to choose between needs for my family rather than wants. As like many other people, I saw tax season as the time, I could get ahead of the challenges I faced. If the EITC had not been refundable, I would have missed out on extra income that helped me to stock up my freezer to shorten the cost on food and it helped me to not have to choose between needs, but to meet the need. By expanding the EITC many families who struggle, will be able to find a light at the end of the tunnel,” said Marcia Dinkins, who benefitted from the EITC.
Brown’s bill would roughly double the EITC for working families and increases the credit for childless workers almost sixfold. Under the proposal, the maximum tax credit available increases to $12,349 for families with three or more qualifying children; $10,976 with two qualifying children; $6,370 with one qualifying child; and $3,054 with no qualifying children. Currently, a family of three can receive a maximum credit of $6,431 and someone with no children can receive at most a $519 tax credit.
The bill would allow for a worker with no children who makes up to $38,498 annually to still be eligible to receive the tax credit and covers a family with three or more children making up to $78,804 a year to receive the EITC. The current maximum qualifying income to receive the EITC is $15,270 for childless workers and $49,194 for families with three or more children.
The legislation also includes new language to expand the credit so that individuals taking care of children or aging parents can claim the credit as well as students who are working to support themselves as they pursue their education.
The bill also recognizes many Americans live paycheck to paycheck and includes a provision that would provide an Early Refund EITC as an alternative to payday loans and other predatory lending products, which typically carry exorbitant fees and charges. Payday loans are generally made to individuals who are working and often eligible for the EITC. The average payday loan is about $375. This provision of the bill aims to breaks the cycle of debt by offering workers to annually claim a one-time, $500 advance on the EITC for the following taxable year.
The proposed EITC expansion would be phased out at higher income levels and remain fully refundable.
Earlier this year, Brown introduced a pair of bills with Sen. Dick Durbin (D-IL) to encourage corporations to invest in their workers. The Patriot Employer Tax Credit Act would provide a tax credit to companies that provide fair wages and good benefits to workers. This is the first bill introduced by Durbin in the 116th Congress. The Corporate Freeloader Fee would levy a fee on large mega-corporations that are often extremely profitable yet pay their workers poorly.
Brown is also working on legislation to improve and strengthen the Child Tax Credit for families with young children.