WASHINGTON – U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Richard Blumenthal (D-Conn.) joined U.S. Senator Sherrod Brown (D-Ohio) and a group of 42 other Senate Democrats in introducing their Working Families Tax Relief Act – legislation to put money back into the pockets of working Connecticut residents and ensure that no worker can be taxed into poverty by the federal system. The bill would expand access to the Earned Income Tax Credit (EITC) and the value of the Child Tax Credit (CTC).
“My job in Congress is to do everything I can to help make it easier for Connecticut’s families to save money and build better lives,” said Murphy. “Right now, there are too many hardworking people paying more in taxes than they can afford. Our Working Families Tax Relief Act will help ease the struggle for more working people, and put some of their hard-earned money back into their pockets.”
“This commonsense measure will ease the tax burden on middle class workers and allow them to pocket more money from their hard-earned paycheck,” said Blumenthal. “By expanding access to the Earned Income Tax Credit and Child Tax Credit, more individuals and families in Connecticut will be able to make ends meet while building more stable, secure financial futures.”
Together, the EITC and CTC help lift Americans out of poverty. The Connecticut EITC boosted about 6,600 people over the poverty line and eased poverty for another 99,000. The EITC is a refundable tax credit for low-income Americans that encourages work and helps families make ends meet. The CTC is available for taxpayers with children in the amount of up to $1,000 per child under age 17. In 2015, the CTC lifted 1.6 million children out of poverty.
The Working Families Tax Relief Act would make the following four changes:
1. Expand EITC for Childless Workers: Workers who don’t claim children are the sole group that the federal tax system can tax into poverty or deeper into poverty. There is a small credit for workers not raising children in the home, but the maximum credit amount is $510 and the credit begins to phase out at $8,340 and phases out completely at $15,010. In addition, all workers that do not claim children and are younger than 25 are ineligible for the EITC. The result is that the EITC for a full-time, minimum-wage worker not claiming children is $27 – making workers who do not claim children the only group of taxpayers that can be taxed into poverty. The Working Families Tax Relief Act reduces the age limit to qualify for the EITC from 25 to 21 and expands the size of the credit so the same full-time, minimum wage worker would earn a refundable credit of approximately $913.
2. Strengthen the Child Tax Credit for Families with Young Children: The bill builds on the proven success of the CTC to lift children out of poverty. The legislation will focus on the most vulnerable children by allowing taxpayers to claim a refundable credit equal to 45 percent of each dollar earned up to a maximum credit of $3,000 per-child under six years of age.
3. Index the CTC to inflation: A recent study from Columbia University concluded that if the CTC is not indexed, 750,000 children under 17 and their families will fall below the poverty line by the end of the decade. Brown’s bill would index the maximum CTC and the income thresholds at which the credit begins to inflation.
4. Make it easier to claim the EITC: Brown’s bill includes a pair of bipartisan measures, originally proposed by the George W. Bush Administration, designed to simplify and clarify who can claim a child. The first proposal simplifies the complicated rules for how parents who are separated can claim the EITC. The second proposal allows filers who live with a qualifying child, but do not claim the child for the EITC, to claim the childless EITC proposed in Brown’s bill.
In the year-end tax package in 2015, Murphy and Blumenthal helped secure a permanent expansion of the EITC and CTC.
U.S. Sens. Dick Durbin (D-Ill.), Michael Bennet (D-Colo.), Chuck Schumer (D-N.Y.), Ron Wyden (D-Ore.), Pat Leahy (D-Vt.), Dianne Feinstein (D-Calif.), Patty Murray (D-Wash.), Jack Reed (D-R.I.), Bill Nelson (D-Fl.), Tom Carper (D-Del.), Debbie Stabenow (D-Mich.), Maria Cantwell (D-Wash.), Robert Menendez (D-N.J.), Ben Cardin (D-Md.), Bernie Sanders (I-Vt.), Bob Casey (D-Pa.), Claire McCaskill (D-Mo.), Amy Klobuchar (D-Minn.), Sheldon Whitehouse (D-R.I.), Jon Tester (D-Mont.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.), Mark Warner (D-Va.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), Al Franken (D-Minn.), Chris Coons (D-Del.), Brian Schatz (D-Hawaii), Tammy Baldwin (D-Wis.), Mazie Hirono (D-Hawaii), Martin Heinrich (D-N.M.), Angus King (I-Maine), Tim Kaine (D-Va.), Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), Cory Booker (D-N.J.), Gary Peters (D-Mich.), Chris Van Hollen (D-Md.), Tammy Duckworth (D-Ill.), Maggie Hassan (D-N.H.), Kamala Harris (D-Calif.), and Catherine Cortez-Masto (D-Nev.) joined Murphy, Blumenthal, and Brown in introducing the legislation.
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