ICYMI: Center on Budget and Policy Priorities Finds Brown’s Working Families Tax Relief Act Would Benefit 3 Million Veteran and Active-Duty Households

Senator Led 46 Democrats in Introducing Working Families Tax Relief Act, which Boosts Child and Earned Income Tax Credits Report Finds Brown’s Bill Would Help 46 Million Households, Including 3 Million Veteran, Active-Duty Households

WASHINGTON, D.C. – In case you missed it, ahead of Independence Day, a Center on Budget and Policy Priorities (CBPP) report found that U.S. Senator Sherrod Brown’s (D-OH) Working Families Tax Relief Act would help 46 million households, including 3 million veteran or active-duty households. Brown’s bill, which he introduced in April, would cut taxes for workers and families by expanding the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).

In May, the New York Times reported that the Institute on Taxation and Economic Policy found that Brown’s Working Families Tax Relief Act would cost significantly less than the Republican Tax Bill that was signed into law last year. 

The Center on Budget and Policy Priorities article can be read below and HERE.

3 Million Veteran or Active-Duty Households Would Benefit From Working Families Tax Relief Act 

By: Chuck Marr 

June 27, 2019

Independence Day reminds us of the freedoms we enjoy, and of those who have served or are serving our nation in uniform to preserve those freedoms. Unfortunately, many veterans struggle to move ahead, or even to stay afloat, because their jobs don’t pay enough to ensure that they can afford the basics for themselves and their families. An important proposal to support low-wage workers is the Working Families Tax Relief Act, which would help 46 million households, including 3 million veteran or active-duty households.

Proposed by Senators Sherrod Brown, Michael Bennet, Dick Durbin, and Ron Wyden and Representatives Daniel Kildee and Dwight Evans, the legislation would strengthen the highly successful Earned Income Tax Credit (EITC), raising the incomes of low-wage workers. It would also improve the Child Tax Credit by helping millions more kids in low- and moderate-income families get a good start in life.

The legislation would:

  • Expand the EITC for families with children by roughly 25 percent.
  • Substantially strengthen the very small EITC for workers who aren’t raising children in their homes — the sole group that the federal tax code now taxes into, or deeper into, poverty. It would also extend the current age range of those who can claim the credit from 25 to 64 years old to 19 to 67 years old.
  • Make the Child Tax Credit fully refundable so children in lower-income households, including those with little or no income, could benefit fully from it. The proposal would also create a larger, fully refundable Young Child Tax Credit, boosting the Child Tax Credit to $3,000 per child under age 6, up from its current $2,000 per child.

Among veteran and active-duty families, the benefits would be shared broadly across racial groups and regions, from 4,300 households in Vermont to 280,300 in Texas (see data below for other states). In about 85 percent of the 3 million households, the head of household or spouse is a veteran; in 17 percent, the head of household or spouse currently serves in the military (in a small number of households, one spouse is a veteran while the other currently serves).

The Working Families Tax Relief Act would begin to address decades-long wage stagnation by giving working people, including veterans, a needed boost. Its extension of the EITC’s age range would be particularly helpful to young veterans transitioning to civilian life. Consider, for example, a 23-year-old veteran who recently completed his Army service and is now working full time as a fast-food cook at the minimum wage. He earns $14,500 and, after paying taxes, has income that puts him below the poverty line. Under the legislation’s stronger EITC for childless adults and its extension of the EITC age eligibility, he’d be eligible for the credit, boosting his income by $1,530 and keeping him from being taxed into poverty.

For a veteran who is a single mother of a 4-year-old and a 7-year-old who earns $20,000 a year as a home health aide, the bill would raise her EITC by about $1,460 and her Child Tax Credit by $2,210, for a combined gain of about $3,670. That would mean more money to buy basic necessities, make needed home repairs, maintain a car to get to work, or, in some cases, get the additional education or training needed to secure a better, higher-paying job. And the income boost would help her children, as well. Young childhood is an important and vulnerable time, during which better family income can improve poor children’s life opportunities, research shows.

The 2017 tax law provided the overwhelming share of its benefits to the highest-income people and most profitable corporations. Policymakers should revisit the 2017 tax law and, when they do, they should reallocate the tax benefits by strengthening the EITC and Child Tax Credit, as the Working Families Tax Relief Act (and other similar bills) propose.

APPENDIX TABLE 1

Veteran or Active-Duty Households That Would Benefit From Working Families Tax Relief

State    Number of Households

Total U.S.       3,015,300

Alabama          55,600

Alaska 17,600

Arizona           73,500

Arkansas         35,300

California        263,700

Colorado         64,400

Connecticut     18,500

Delaware         8,600

Dist. of Columbia        3,600

Florida 209,300

Georgia           128,100

Hawaii 34,000

Idaho   20,900

Illinois 86,100

Indiana            59,800

Iowa    25,300

Kansas 38,400

Kentucky        51,000

Louisiana         51,900

Maine  14,100

Maryland         52,400

Massachusetts 32,200

Michigan         76,100

Minnesota       41,500

Mississippi       34,000

Missouri          69,500

Montana          14,700

Nebraska         18,700

Nevada            30,700

New Hampshire          11,200

New Jersey      32,800

New Mexico    24,300

New York       89,600

North Carolina            146,838

North Dakota  9,648

Ohio    106,541

Oklahoma        53,177

Oregon            39,976

Pennsylvania   93,300

Rhode Island   6,700

South Carolina            69,400

South Dakota  10,200

Tennessee        77,400

Texas   280,300

Utah    21,900

Vermont          4,300

Virginia           144,200

Washington     92,500

West Virginia  20,200

Wisconsin        41,800

Wyoming        9,500

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