105 posts categorized "Tax Credits"
By Sarah Godfrey
The now infamous video that shows presidential candidate Mitt Romney talking about “the 47 percent” of Americans who “pay no income tax” has the entire country discussing who does or does not pay taxes. Romney’s remarks have thrust into the spotlight a study that is actually a smart, common-sense analysis of taxation that shows that everyone—especially the poor— pays.
The "47 percent" figure is taken from a Tax Policy Institute study that found 46.4 percent of Americans did not pay federal income tax in 2011, but even the Institute itself has said its findings have been largely misconstrued. “Commentators have often misinterpreted that percentage as indicating that nearly half of Americans pay no taxes. In fact, however, many of those who don’t pay income tax do pay other taxes—federal payroll and excise taxes as well as state and local income, sales, and property taxes,” the group wrote in a 2011 response to its findings.
Derek Thompson, writing in the Atlantic on Sept. 18, put it plainly: “When you hear ‘The 47 percent,' you should think old retired folks and poor working families.” The Washington Post’s Wonk Blog analyzed the same Tax Policy Institute study, and found that of the roughly 47 percent of those who don’t pay income tax, 60 percent are still paying into Social Security and Medicare. Another 22 percent of non-payers are retirees. “Only about 7.9 percent of households are not paying any federal taxes at all,” wrote Brad Plumer. “That’s usually because they’re either unemployed or on disability or students or are very poor.”
The poor actually often shoulder a greater share of the tax burden relative to their income, contrary to the conventional wisdom in some circles. A 2012 Citizens for Tax Justice study found that the poorest fifth of Americans, a group with an average cash income of $13,000 per year, saw 17.4 percent of their incomes go to taxes last year.
The Twin Cities Bread team meets with Rep. Erik Paulsen last month. Pictured: (front row, l to r) Audrey Johnson, Ed Payne, Brad Pepin; (back row, l to r): Gerry Peterson, Dick Johnson, Rep. Paulsen, Judy
Waeschle, Carol Dubay, Lois Troemel. (Photo courtesy of Twin Cities Bread team)
By Robin Stephenson
It is critical for lawmakers to hear from their constituents as we
head into a lame duck session, during which members of Congress will make choices
about programs for hungry and poor people. Bread teams know
that a personal visit is the most influential type of contact with a
member of Congress, so our activists
across the nation have been setting up local meetings.
In Minneapolis, the Twin Cities' Metro Area Team used the fall recess as an opportunity for in-district meetings with Rep. Erik Paulsen and Rep. Betty McCollum. In a recap of their meeting with Rep. Eric Paulsen’s office, the team outlined its approach:
“Our district coordinator, Carol Dubay, arranged the meeting for September 5 and contacted each of us to meet a few minutes ahead of time in order to plan what we would emphasize. Of course, we framed our discussion in terms of the Circle of Protection for the poorest among us. But since the Congressman is on the committee that makes decisions on taxation, we emphasized the need to maintain the benefits of the Earned Income Tax Credit and the Child Tax Credit programs.”
[Read more of the recap on the Twin Cities' Metro Area Team's website.]
The team that met with Rep. McCollum’s office included three young hunger activists:
“Fourteen people, including three preteens, visited the local office of Minnesota representative Betty McCollum during the August recess. They urged her to continue nudging her House colleagues to remember those they represent who are people living with poverty and hunger.
"The young people explained their concern using a visual they had made showing how little of the federal budget goes to help people in need. The group urged Rep. McCollum to remember to keep the 'circle of protection' around specific programs which provide the most effective help to those with less means than most of us but who are may be members of her constituency and are certainly all God’s children. The meeting with the legislative director, Peter Frosch, was one filled with issues, listening, personal stories, encouragement from all sides, and a sense of being of one mind about the needs and some of the solutions.
"Fourteen people went home feeling empowered and willing to visit this office and the offices of senators again.”
Robin Stephenson is Bread for the World's social media lead and senior regional organizer, western hub.
A weekly legislative update from Bread for the World's government relations team.
The House and Senate are both in session beginning Wednesday of this week due to the Jewish holidays. They won’t stay in session long, though. It’s an election year, and members of Congress are eager to get home to campaign.
Programs that help people who are hungry and poor have been consistently under threat of devastating cuts during budget negotiations—whether that be the annual budget for the next year or a comprehensive deficit reduction bill that budgets for the next 10 years. New developments affecting those negotiations include a continuing resolution passed in the House, a new report from the administration outlining the effects of across-the-board budget cuts scheduled to begin in January, and the bipartisan negations being conducted by the Gang of Eight in the Senate.
Last week, the House passed a six-month continuing resolution (CR, temporarily funding government operations until a budget is passed) to fund federal discretionary programs at roughly current levels, plus a 0.6 percent increase for the first part of the 2013 fiscal year. The Senate is expected to vote on (and pass) the CR this week.
The farm bill—a bill which governs federal farm and food policy—is set to expire on September 30, 2012, and programs for two of Bread for the World's mini-campaigns, Supplemental Nutrition Assistance Program and International Food Aid, are authorized through the legislation. The Senate passed its version of the Farm Bill last June. However, with seemingly no chance of leadership allowing floor time for the House Committee on Agriculture farm bill, Iowa Democrat Bruce Braley filed what is called a discharge petition. If signed by a majority of the House (218 members), it would force the House to vote on the bill. The petition had 27 signatures as of Thursday afternoon.
Congress could still pass a farm bill extension before September 30 or they could let the bill expire and deal with an extension or re-authorization in the lame duck session in November/December once the outcome of the elections is clear.
On Friday, the administration released its sequestration report ($1.2 trillion in across-the-board spending cuts that are scheduled to begin in January and last nine years), detailing how automatic cuts would be implemented. The report, well over 300 pages, provides an estimate of the percentages and dollar amounts that would be cut from every discretionary and mandatory spending account at the program, project, and activity levels, as well as a list of accounts that are exempt from cuts. The negotiated CR does not alter the path of sequestration.
The bipartisan group of Senators called the Gang of Eight continues to meet, trying to develop a comprehensive, bipartisan deficit reduction agreement that would replace the sequester with a comprehensive plan for deficit reduction, including additional tax revenues and further spending cuts. If successful in reaching a deal that Congress enacts, their proposal could determine the available funding for programs for hungry and poor people for the next 10 years. Those involved in the Gang of Eight include Senators Warner (D-VA), Durbin (D-IL) , Conrad (D-ND), Bennet (D-CO), Chambliss (R-GA), Crapo (R-ID), Coburn (R-OK), and Johanns (R-NE).
In July, with the Circle of Protection partners, Bread for the World urged Barack Obama and Mitt Romney to answer one question: what about hungry and poor people? Last week, their video responses were released. Now it's time to ask the same question of our members of Congress and others running for office during this election season.
The U.S. Census Bureau released its most recent poverty figures last week, and one thing was clear: the safety net is critical during these tough economic times. The official Census Bureau poverty numbers do not account for programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and the Earned Income Tax Credit (EITC), which help dramatically reduce poverty. If the data accounted for SNAP, it would show that 3.9 million fewer people would have been in poverty in 2011, and if it accounted for the EITC, then 5.7 million fewer people would have been in poverty, including 3.1 million children.
During the lame duck session of Congress our elected officials will be making tough choices about the budget. They can choose to protect programs vital to poor and hungry people or they can choose to drastically cut funding to those programs that have kept food on millions of tables as so many Americans struggle to find adequate employment. They can choose to cut poverty-focused foreign assistance, which would cost lives, or save lives abroad with an investment of less than one percent of the federal budget. We can influence the right choices. We must maintain the integrity of SNAP, Special Supplemental Nutrition Program for Women, Infants and Children (WIC), tax credits for low-income families, funding for food aid, and poverty focused development aid.
Please join Bread’s expert organizing and policy staff on Tuesday, September 18, as we discuss why this year’s elections are so important and talk about our different tools for engaging your elected officials.
Maryland activists participate in Bread for the World's 2011 Lobby Day. (Photo by Jim Stipe/Bread for the World)
- Develop an “elevator speech” for why ending hunger is important to you as a Christian.
- Register to vote.
- Write a letter to your local paper saying that ending hunger is a priority for you as a voter.
- Learn what the candidates are saying about ending hunger.
- Speak about the importance of ending hunger at candidates’ town hall meetings.
- Engage your friends. Make sure they are registered and know what the candidates are saying about ending hunger.
- Magnify your voice by combining it with those of thousands of other Christians. Become a member of Bread for the World; organize an Offering of Letters.
- Engage your church.
- Give money and volunteer time to candidates who are committed to ending hunger.
- VOTE for candidates who are committed to ending hunger.
During the August recess, as we lead up to the lame duck session, Bread members are setting up meetings with members of Congress and their staff at local offices to make sure that hunger issues are part of the campaign conversations.
by Amelia Kegan
On Wednesday, the House of Representatives voted on two competing tax proposals: H.R. 8 and H.R. 15. News accounts reported that H.R. 15 would extend tax cuts for those earning up to $250,000, and H.R. 8 would extend tax cuts for everyone. But that is not the whole story. The previous blog post explained how H.R. 8 continue tax cuts for everyone except low-income working families. Now let's look at the other bill.
H.R. 15 Extends Tax Cuts to Everyone
Contrary to some claims, H.R. 15 doesn’t just extend tax cuts for those earning under $250,000; it extends tax cuts for everyone. If you make more than $250,000, you still get to keep your tax cut on that first $250,000. You’ll have to pay a higher rate on the income earned over $250,000, but you still get that tax cut on the first $250,000—just like everyone else.
Tax cuts on people’s second $250,000 and third $250,000 add up. The amount of money that is not collected because of tax cuts on income above a quarter million dollars comes to $830 billion over ten years. What does $830 billion look like? If you spent $1 million every day from the day that Jesus was born, you would not have spent $830 billion.
$830 billion is over 550 billion meals under the SNAP program.
H.R. 15 also extends the low-income tax credits that H.R. 8 lets lapse. So it really does extend tax cuts for everyone, even low-income families.
by Amelia Kegan
On Wednesday, the House of Representatives voted on two competing tax proposals: H.R. 8 and H.R. 15. News accounts reported that H.R. 15 would extend tax cuts for those earning up to $250,000 and H.R. 8 would extend tax cuts for everyone. But that is not the whole story.
H.R. 8 Would Not Extend Tax Cuts for Everyone
H.R. 8 failed to extend critical tax credits for low-income working families—the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). These are the salient details about the bill:
- H.R. 8 eliminates EITC marriage-penalty relief.
- H.R. 8 prevents families from earning even $1 of the CTC until they make at least $13,000.
- H.R. 8 reduces EITC benefits for families with three or more kids.
Congress has made significant improvements to EITC and CTC, so H.R. 8 would harm millions of low-income working families in 2013 by allowing the improvements to expire. These will be some of the consequences if the bill passes:
- 8.9 million families, including 16.4 million children, would be harmed if earnings below $13,000 are no longer counted toward the tax credit.
- 3.7 million families, including 5.8 million children, would lose the Child Tax Credit entirely.
- 6.5 million families, including nearly 16 million children, would be hurt by the expiration of the EITC improvements.
Today I went to Capitol Hill to listen to Rev. David Beckmann and other Christian leaders urge the House of Representatives to defeat HR 8, a tax bill that would extend 2001 and 2008 tax cuts to wealthy Americans and reduce the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) benefit levels. Delivering a statement backed by nearly 60 prominent faith leaders, Rev. Beckmann, president of Bread for the World, prodded Congress to take a deeper look at the effects of cutting crucial tax credits that help the hungry and poor.
As Rev. Noel Castellanos of the Christian Community Development Association pointed out in his remarks, few of the families that rely on tax credits are present on the Hill to speak out against this House bill; therefore, others must speak for them.
Rev. Beckmann addressed the policy makers first by arguing that if the House bill goes through, there will be no tax incentive for couples to get married. He also addressed inequities in the tax system that places more of a burden on the poor. Rev. Beckmann reminded Congress that wealthy individuals should recognize that payment of taxes is a just action, quoting the Apostle Paul’s statement that government authorities are ministers of God.
Sister Simone Campbell of the prominent Nuns on the Bus movement preached that tax cuts for the rich have consistently hurt the bottom 20 percent of U.S. households. Contrary to the rhetoric behind those tax cuts, the benefits do not trickle down to the poor, she said. Sister Campbell insisted that our country needs to be a moral and united nation, supporting families that are hungry and poor.
Along the same lines, Rev. Michael Livingston of the National Council of Churches said he prays that Congress get a conscience and finds a heart. “How can Congress extend tax cuts to millionaires and cut programs like SNAP to poor and hungry families?” asked Livingston.
Rev. Jim Wallis of Sojourners stated that this Republican budget is an immoral document, and that for Catholic lawmakers it is a direct offense to Catholic social teaching.
Bread for the World hopes that Congress continues to create a circle of protection around poor and hungry people in today’s House vote by upholding the current EITC and CTC benefit levels. We must pressure Congress to stop protecting the top 2 percent.
And we need to love our neighbor as we love ourselves.
Photo courtesy © Royalty-Free/Corbis
As a husband and father of four, I want to provide for my family—on my own. I am striving toward this end and believe I will get there. At the same time, we have received countless blessings along the way, from a wedding check we found hidden in Frugal Living for Dummies six months after our honeymoon to interest-free car loans and mortgage down payment assistance from generous parents. And those are just two drops in the well.
At times we have written these blessings in a journal. Always, we try to notice and to thank God for them. It is in this same grateful spirit that my wife and I anticipate the blessing of the Earned Income Tax Credit and Child Tax Credit as the tax documents begin hitting our mailbox in January.
We live frugally and have made decisions to cut unnecessary expenses. I see the dollars slip out of our air-conditioned home when the front door is left ajar. On the train last week, some fellow commuters were bewildered when I told them we do not receive any television channels. We use coupons and shop at our local Aldi and wholesaler. Our mortgage payment is less than what most families pay for rent.
Some people (like my young children) just don’t seem to care as much about pinching pennies as I do! These means of stretching our dollars—which I happen to enjoy and my wife tolerates—are also a blessing.
And yet, as frugally as we live and as greatly as we have been blessed, we still struggle to make ends meet. The Earned Income Tax Credit and the Child Tax Credit help keep our family afloat financially. It is difficult for me to imagine how families carry on with less.
Thank you, faithful God, for providing for us. And I will continue doing what I can to protect my family and the many families that need these credits even more—much more—than we do.
+ Find out more about the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC)—and what you can do to help keep it in the budget.
Zach Schmidt is the Central Midwest field organizer at Bread for the World.
Heather Rude-Turner, 31, of northern Virginia, was once a single mom receiving WIC, SNAP, and EITC. Because of this, she said that she can relate to some of the low-income families who bring their children to the childcare center where she works as a teacher. Photo by Laura Elizabeth Pohl/Bread for the World.
Fifty-one senators need a thank you for doing the right thing and voting in favor of a Senate bill that includes a one-year extension to the Expanded Earned Income Tax Credit (EITC) and Child Tax Credit. The bill is not yet law; there will be a similar vote in the House soon. But today we need to thank those members we have been messaging all year to extend the credits as part of the circle of protection.
In the past three years, we have campaigned twice for strong tax credits for working families, because these programs are two of the most effective government programs to combat child poverty. Tax credits often serve as ladders out of poverty.
We have even been blessed to see a life transformed over that time.
Remember the first time you watched Heather Rude-Turner’s story in the 2010 Offerings of Letters video? It was really tough to listen to the pain in Heather’s voice when she said, “I don’t eat a lot of the time because I feel bad—because I’m taking the food away from my kids. And I feel like if we have one banana in the house, if I can cut it in half, they can each have half of a banana. I don’t need vitamins: I’m all grown up.”
Another video one year later showed how EITC had given Heather the tools to transform her family’s life Watching her eat a banana in the midst of all those blessings, I said a tearful prayer of thanks—thanks that we are people of faith willing to address members of Congress and stand up for families who are busy being poor, and thanks for the members of Congress who fight for them.
We respectfully ask for justice from our elected officials, but we also must empower them by publicly saying, “Thank you for doing the just thing.”
If your senator voted “yea” on this roll call list, send him or her an email, write on his or her Facebook wall, or tag him or her in a tweet and say, “Thank you, Senator, for standing with children and voting to extend tax credits for working families.” Use the hashtag #BreadActs on Twitter so we can re-tweet you.
+There is still time to influence your Representative. Send an email today.
Robin Stephenson is regional organizer at Bread for the World.
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