The President’s proposed budget for fiscal year 2015 includes several important improvements to the pro-work Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) that will reduce poverty among low-wage workers and their families, reduce income inequality, strengthen work incentives, and give a boost to Arkansas’s economy – all without adding a dime to the deficit.
A new report from the Center on Budget and Policy Priorities breaks down the impact of the EITC and the CTC in Arkansas.
For families with children, the EITC and CTC combination is our most powerful anti-poverty tool. These two credits lifted an average of 113,000 people, including 59,000 children, in Arkansas out of poverty each year from 2010 to 2012. The President’s proposal also will help low-income working families with children by making important improvements to the EITC and CTC permanent. These improvements, first enacted in 2009 and slated to expire in 2017, have made more low-income working families eligible and boosted the credit for many others.
The EITC has a proven track record of boosting employment among parents. And, research has shown that the EITC also has important positive long-term impacts on children – helping them to do better in school, improving academic performance, and boosting college attendance rates. It would also give our economy a boost. Eligible workers will get to keep more of what they earn and, in turn, spend those dollars here in our state. Congress should take the next step and approve the President’s proposal to improve these important tax credits to encourage work, reduce poverty, and invest in Arkansas’s future.