Report: Extending, enhancing earned income tax would impact 618,000 Ohioans

Ronald Reagan called Earned Income Tax Credit “the most effective anti-poverty program in the U.S.”
Norwalk Reflector Staff
Mar 22, 2014

 

U.S. Sen. Sherrod Brown (D-Ohio) has released a new report showing that strengthening and enhancing the Earned Income Tax Credit (EITC), which Ronald Reagan called “the most effective anti-poverty program in the U.S.,” would impact 618,000 Ohioans; sixth most in the country.

Brown is the author of the Working Families Tax Relief Act, legislation that would answer the call of the Administration and leading Republicans by making permanent enhancements to the EITC and expanding its eligibility to workers without children. By doing so, Brown’s bill would make 308,000 Ohioans eligible for the EITC and increase benefits for another 310,000. In fact, seven Ohio metropolitan areas rank in the national top 100 for the  number of workers who would be impacted: #24 Cincinnati, #26 Cleveland, #32 Columbus, #57 Dayton, #58 Toledo, #60 Akron, and #85 Youngstown.

“The Working Families Tax Relief Act would ensure that Americans who work hard and take responsibility can take home more of their pay each month,” Brown said. “By strengthening the EITC, and expanding its eligibility to workers without children, we can help create a path to the middle class for 618,000 Ohioans. Rewarding Americans for hard work and providing them greater opportunities should be a bipartisan goal. This new Brookings report is further evidence of that.”

The EITC is a refundable tax credit that encourages work, helps families make ends meet, and leads to healthier, better educated children. In 2012, more than 27 million taxpayers received nearly $62 billion in EITC benefits. In 2011, according to the Internal Revenue Service (IRS), the EITC lifted 6.6 million Americans out of poverty, 3.1 million of whom were children—with the average EITC family claiming an average of $2,200. But in contrast to the EITC for working families with children, the EITC for workers without children remains extremely small—too small even to fully offset federal taxes for workers at the poverty line. Under current law, workers without children or noncustodial parents working full-time are only eligible to receive a minimum benefit. Such an individual would receive the maximum EITC if he or she had children. As a result, low-wage workers not raising minor children are the only Americans taxed into poverty.  

But according to a new report by the Brookings Institution, passing the Working Families Tax Relief Act would:

Nationally:

Increase the number of eligible EITC workers without children by 7,617,000
Increase the EITC benefits for 7,575,000 workers without children
Impact, in total, 15,192,000 workers without children
Increase the monthly EITC benefit by $450
Make the average monthly EITC benefit $710

In Ohio:

Increase the number of eligible EITC workers without children by 308,000
Increase the EITC benefits for 310,000 workers without children
Impact, in total, 618,000 workers without children
Increase the monthly EITC benefit by $450
Make the average monthly EITC benefit $710

That is because the Working Families Tax Relief Act would: 

· Strengthen the Earned Income Tax Credit: The legislation would expand access to the credit, allowing a full time worker receiving the minimum credit to be eligible for the maximum EITC. The bill will also make the credit available to workers without children.

· Change the Eligibility Age: Under current law only individuals older than 25 and younger than 65 are eligible for the childless component of the EITC. The legislation would make individuals older than 21 and younger than 65 eligible.

As a result, the Brookings Institution concludes that, “…it is clear that strengthening these two key components of [the Working Families Tax Relief Act ]—broadening the age range over which workers qualify for the credit and increasing the maximum credit and phase in/out rates—would significantly increase the EITC’s impact for millions of workers without qualifying children. Modernizing this provision of the EITC by enacting these expansions would help ensure that the credit is as effective a work incentive and poverty alleviation tool for childless workers as it continues to be for working families.”

In April 2013, Brown and U.S. Sen. Dick Durbin (I-IL) were joined in cosponsoring the Working Families Tax Relief Act with then Senate Finance Committee Chairman, Max Baucus (D-MT), and current Chairman, Ron Wyden (D-OR). In total, 33 Senators are co-signers of Brown’s legislation, including 9 from the Senate Finance Committee. Also in April 2013, a coalition of 300 organizations nationwide wrote a letter to Brown and Durbin in support of the bill and its efforts to preserve and strengthen the EITC.

Comments

truckin

and where does this extra $ come from??
If an extra couple grand is all that is needed to pull someone out of poverty, why not let the guy or gal pick up a few extra hrs restocking shelves at night somewhere?
Also with this extra for one's with children, make them use it ONLY for extra child care expense's... so they too can get off there fanny and just pick up a few extra hrs...
Wouldn't that even things out a little? yet making one feel of self-worth through hard work? instead of being subject to folks like me, with my smirk remarks ...about bums taking the easy way out?

jas

Why would any "conservative" oppose this proposal? It continues an idea started by Reagan and allows "working" people to keep more of the money they earn. Of course, it doesn't help the lazy non-working wealthy who earn their income from investments or those that inherit their wealth but it does help those who actually work for a living.

Contango

Re: "income from investments,"

So you've saved NOTHING for retirement, but expect to survive off the crumbs that the Washington bureaucrats in their beneficence will possibly provide you in your senior yrs?

jas

No, I don't expect to survive on Social Security. I'm vested in an actual pension plan. Thirty years ago, before Reagan destroyed our economy with his trickle down economics and deregulation mania, more than 30% of working people had pension plans. Now, it's less than 5%. What happened to the 25%? They were forced into relying upon Social Security and the joke that is 401(k)'s. Social Security is a form of corporate welfare because it saves corporations the money they would spend on having actual pension plans. Just more of the GOP policies to benefit the wealthy at the expense of everyone else.

Contango

Re: "I'm vested in an actual pension plan."

And those assets are invested in what?

Good luck just depending on your defined benefit plan and SS as your sole sources of income.

In my opinon

@Contango

If you make 50,000 a year, you pay

$247.75 a year for defense
$3.98 for (FEMA)
$22.88 unemployment ins.
$36.82 a year for SNAP (food stamps) which 51 percent goes to military famlies
$6.96 for welfare
$43.78 for retirement and disability to govt. workers (civilian and
and military
$235.81 a year for medicare
$4,000 a year in corporate subsidies

ARE you sure you're P- oed at the right people.

Contango

Re: "corporate subsidies,"

You mean normal business income tax deductions?

Define the term.

In my opinon

I would not consider billions in profit a normal business.
Throughout the course of the Iraq War, Haliburton, once headed by former Vice President Dick Cheney, made just shy of $40 billion in taxpayer-funded government contracts associated with the Iraq War.

The top five oil companies — ExxonMobil, BP, ConocoPhillips, Chevron and Shell — receive a combined $4 billion in tax breaks each year. These oil companies continue to rake in record profits. In 2012, the oil companies, in combination, earned $118 billion in profits, with $72 billion in cash reserves. I don't know if you can comprehend the taxes the would lower our deficiet if they didn't spend millions on lawyer's to save them billions in taxes and reap those billions in profit. They should pay their FAIR share.

And lets not forget Walmart, the Walton family has a net worth of 144.7 billion and yet they don't pay a decent income that their employee's can survives without assistance, then considered them takers.

You seem to be ok with a "NORMAL" business deduction but don't seem to want to give a "NORMAL" working family a earned credit income tax break, which amounts to pocket change in comparison. I don't and never will understand why some people support the corporations getting all the tax breaks and hard working family's get kicked in the teeth. When I had my business I paid my employees a good living wage and I was rewarded with great production and loyal employees. I always lived by the thought that I was on the other end at one time. How much money does one family need to live well? 1 billion, 15 billion 144 billion, what is enough?

Contango

Re: "When I had my business,"

Assume that you sold the business at a profit?

In what are those assets invested currently?

In my opinon

My future, Social Security is not enough to live on but not everyone is in a place that they have this opportunity. I for one don't mind helping the under dog, just the way I was raised, and by some of the comments on here all I can say is I feel good about myself.

KnuckleDragger

So, by your definition my wife and I who both work in excess of 60 hrs a week and make too much to qualify for the EITC are lazy? You also decided to lump everyone who has a 401K or a retirement account that invests in the market or those whose parents die and leave them with an inheritance as lazy? Your comment certainly gets my vote for the most ignorant comment of the day. So tell me, as a highly paid attorney do you pay your fair share of taxes? I bet you have your CPA find every deduction possible in order to minimize what you pay. If that's the case you my friend are a hypocrite.

jas

You must have learned to read from the Rush Windbag School of Selective Reading. I never said all wealthy people are lazy - only those that sit on their butts and rely on investment income to support themselves and those that are fortunate enough to live off the wealth earned by the hard work of their parents and not their own hard work. It's the reason why capital gains should be taxed and inheritance taxes should continue - two things the GOP wants to eliminate for their wealthy friends.

You are misinformed if you think I'm a highly paid attorney. Contrary to popular belief, the median income for lawyers is lower than police officers, fire fighters, and teachers. The legal profession is a lot like the Acting profession. You have your Superstars at the top making huge incomes and you have the other 80% who make an "OK" living or worse.

Contango

Re: "only those that sit on their butts and rely on investment income to support themselves,"

So retirees are lazy?

What about your defined benefit plan?

In what are those assets invested?

Contango

Re: "Ronald Reagan called 'the most effective anti-poverty program in the U.S.,'"

On a brief Google search, I could find no such quote attributed to the EITC by him.

"Trust, but verify" - Pres. Reagan.

However if true, I'll assume that he would not have condoned the current bloated, vote buying program which is annually subject to billions in waste, fraud and abuse of taxpayer dollars.

"Improper Federal Payments Waste over $100 Billion in 2012":

http://mercatus.org/publication/...

Yea, tax the rich; the kleptocrats need more water in order to help fill the federal colander.

truckin

It's just a scam.. Try and take something Reagan sorta said, twist it, put on a spin and go with it to get more people behind idea of providing someone else's money for security of votes.

jas

Best Reagan quote: "Well, I don't know....." and then he goes on to talk about some irrelevant anecdote that doesn't apply to anything. Kind of makes you wonder when the Alzheimer really started. By far, the worst President we've ever had.

Contango

Re: "By far, the worst President we've ever had."

Nah, that would be the current occupant of the WH.

In my opinon

Second one on my Google search.

By Thomas L. Hungerford and Rebecca Thiess | September 25, 2013
The earned income tax credit (EITC), first proposed in the early 1970s, was signed by President Ford. It was later substantially expanded by President Reagan, who deemed it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress” (Snyder 1995).

Contango

Again:

"However if true, I'll assume that he would not have condoned the current bloated, vote buying program which is annually subject to billions in waste, fraud and abuse of taxpayer dollars."

2012: $12.6B

http://mercatus.org/sites/defaul...

Contango

Re: "Earned Income Tax Credit"

"All credit is debt." - Henry Hazlitt, "Economics in One Lesson"

http://www.zerohedge.com/news/20...

In my opinon

Well at least you have to work to collect the earned income credit. So in working your paying into all the funds that are distributed'

Contango

Re: "So in working your (sic) paying into all the funds that are distributed'"

Makes no sense.

Regardless, with a $17.3T (and growing) fed budget debt, we're not covering what we are spending.

Dr. Information

You just cannot fix dumb comments. Jas for example.

In my opinon

I so agree with you.

JACKEL

I think there are a few wealthy that earned their wealth. Not true for Kerry's, Kennedy's and a lot of those millionaires in Washington .

truckin

Funny how most millionaires in Washington weren't rich till they got there? and by "serving the people" the bank accounts grew? Funny how that is so..
actual mystery..

Contango

Re: "most millionaires in Washington,"

Obviously the redistribution of other peoples' money (OPM) pays well.

One of my favs is VP Gore:

He inherited his daddy's shares of Occidental Petro. Then he got richer to the tune of $230M investing in taxpayer subsidized green energy cos. (insider trading anyone?), while also profiting from the hawking of his global warming scam.

truckin

Ya, but the problem is certain people don't really care about the wealth or waste.....of there side..because they have "good intentions"

Dr. Information

Why are so many people jealous of others wealth. I know more wealthy people who went to college and made it all by their hard work vs being handed down something.

In my opinon

@ Dr. I don't think most are jealous of wealthy people just feel they should pay the same tax rate as middle class. They shouldn't get all the preverbal loop hole provisions.

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