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100 posts categorized "Tax Credits"
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.
Original photo of a young boy playing with an Ipad. The child lives in a New Orleans public housing development and the photo sparked controversy over what the poor should be allowed to have.Photo by Rusty Constanza/Times-Picayune.
Like it or not, this question arises fairly frequently—especially when it comes to government assistance for hungry and poor people. Reporter Katy Reckdahl recently brought this issue to light in a July 17 article in The Times-Picayune that sparked considerable outrage among readers. Ironically, the outrage was not directed at the content of her article, which addressed the potential negative impacts a hotel implosion could have on residents of the Iberville public housing development. Instead, readers were indignant about the photo that accompanied the article, taken by photographer Rusty Costanza, which featured an 8-year-old boy playing with an iPad on the steps of the public housing complex.
If you’re wondering what a public housing resident is doing with such an expensive piece of technology, you are not alone. The original article received numerous comments, prompting fellow Times-Picayune reporter Jarvis DeBerry to write his piece five days later. In the July 22 story, Jarvis wrote, “I imagine that at some point or another all of us who aren't poor have decided which items poor folks, especially those on government assistance, should be allowed to have. And which items they should be denied.”
He continued, “City Councilwoman Stacy Head used her taxpayer-funded phone to send an outraged email when she saw a woman using food stamps to buy Rice Krispies treats. What right do the poor have to sweetness?”
The fact that this child is playing with a pricey gadget should not fool us into thinking life in government housing is grand. “The idea that most people in public housing are living the lush life has persisted for at least as long as presidential candidate Ronald Reagan started using the offensive ‘welfare queen,’” Jarvis added, challenging the notion that people in poverty are undeserving of government assistance.
Sadly, images like this one fuel beliefs that federal safety net programs should be reduced. Why are we not all equally as scandalized by the fact that people earning over $250,000 per year receive tremendous tax cuts, credits, and incentives? Tax deductions, exemptions, and credits cost the government over $1 trillion each year, but if lawmakers allow the Bush-era tax cuts for high-wage earners to expire, the federal government would generate $830 billion in revenue over ten years.
“It might help to think of poor people as being as fully human as everybody else and as no more or less flawed.” Well said, Jarvis. Well said.
Kristen Youngblood Archer is the media relations specialist at Bread for the World.
At Bread, we talk about the budget as a moral document outlining our country’s priorities. Taxes are a necessary part of that equation. We often hear that Washington has a spending problem. But really, what we have is a deficit problem. Since a deficit occurs when you spend more than you take in, when people say “spending problem,” they’re ignoring half of the equation.
With all of the heated discussion about taxes, it would be convenient to turn away from the deficit issue and say, “Let’s ignore taxes: they’re complicated; they’re controversial; and they’re boring.” However, as devoted followers of Jesus, we are not the types who choose a path based on convenience. We don’t talk only on those issues that make everyone comfortable. As Christians, we speak from an understanding of the way things could be—when the stranger is given something to eat and widows and orphans are cared for.
Thus, the budget debates and the fiscal problems faced by this country lead us to talk taxes. To help move the conversation, Bread has published a new action guide on taxes, which combines our specific public policy prescriptions with underlying biblical principles—to help you speak up.
We must start talking about taxes, and we need to start talking today. If we do not push our elected leaders to bring in more tax revenue, then our voices will call out in vain to fund vital programs like the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), poverty-focused development assistance, the McGovern-Dole International Food for Education and Child Nutrition Program, Food for Peace, the Healthy Hunger-Free Kids, school lunches, and the Earned Income Tax Credit.
Our deficit situation is so severe in the long-term, that without additional revenue we will be unable to fund programs for hungry and poor people at anything close to their current levels over the long term—unless Congress makes unthinkable and politically impossible cuts. Nearly all mainstream economists agree that we simply cannot cut our way out of this situation. This is not calculus or complex economics. It is simple arithmetic.
Major deficit reduction packages over the past quarter century have not only maintained a commitment to not increase poverty, they’ve also all included substantial tax revenues.
Amelia Kegan is a senior policy analyst at Bread for the World.
Screenshot from CNN.com
On Monday, July 9, we attended a briefing at the White House, during which President Obama called for extending tax cuts for the middle class and small business owners. While we were overwhelmed by this amazing opportunity to listen to our president, we also wanted to take a critical look at some parts of his speech.
During his speech, President Obama noted that he has cut taxes for Americans by an average of $3,600 per year during his tenure. He urged Congress to extend tax cuts for the middle class and small-business owners who make less than $250,000 for another year. He also called on Congress to allow tax cuts for the wealthiest Americans to expire by the end of the year. President Obama emphasized that 97 percent of U.S. business are small businesses, and are the economic root of the nation.
In an ongoing effort to strengthen the middle class President Obama said that we need to “widen the circle of opportunity” for middle class Americans. We found the president’s use of this phrase interesting. Since early 2011, Bread for the World and other organizations have called on Congress and the Obama administration to create a circle of protection around programs vital to hungry and poor people in the United States and around the world.
Photo by Flickr user Franco Bouly
Public dialogue can create public pressure, and raising your voice is critical to avoiding cuts that will take food off the tables of families who most need it. We must encourage members that food assistance is not a political football.
If your member of Congress is on the House Agriculture Committee, tag them in a tweet or message them on Facebook in the next several days leading up to Wednesday’s committee vote on the farm bill. Below are sample tweets and Facebook posts, as well as a chart of links to members' accounts.
Dear @RepX, Cuts to SNAP & Food Aid in the #FarmBill would increase poverty & hunger. Please do the right thing #BreadActs
Dear @RepX Please be a hunger champion & do the right thing. Protect SNAP & food aid funding in #FarmBill #BreadActs
I am counting on your continued leadership for people who are poor and hungry. Please oppose cuts to SNAP and food aid in the upcoming farm bill vote.
As a person of faith, I believe that budgets are moral documents and must not be balanced on the backs of the poor. Please be a leader and oppose cuts to SNAP and Food Aid in the farm bill.
United Church of Jesus Christ (Apostolic) pastors bless more than 500 letters urging Congress to protect programs that are vital to hungry and poor people. The letters were collected as part of Bread for the World’s annual Offering of Letters campaign. From L to R: Lewis Payne, Bishop, Shrewsbury, PA; Robert Williams, Bishop, Richmond Heights, OH; Izett Scott, Bishop, Ft. Lauderdale, FL; Cleven Jones, Bishop, Detroit, MI; Monroe Saunders, Presiding Bishop, Baltimore, MD; Colie L. Lorick, Bishop, Columbia, SC; Don Williams, Bishop, Martinsville, VA; Louis Stokes, Bishop; Hampton, VA; John M. Lewis, Bishop, Waldorf, MD; Robert Johnson, Bishop, Baltimore, MD.
Bread for the World participated in the 46th Annual International Holy Convocation held June 20 to 23, 2012. Nearly 70 United Church of Jesus Christ (Apostolic) pastors -- including Bishop Don Williams, racial/ethnic outreach associate at Bread -- gathered from around the country in Baltimore, MD, for the annual event. Pastors delivered 509 hand-written and typed letters from churches all across the country for Bread’s Offering of Letters campaign.
During the closing worship service on June 23, the letters were blessed by Monroe Saunders, Presiding Bishop for the United Church of Jesus Christ (Apostolic.) Churches came together and over 2500 people attended the conference on the last day. The event demonstrated an important show of support for poor people by the bishop and churches.