Time to put people first
At this moment, Congress is considering two major tax policy changes: One would give a tax break to wealthy tech and other corporations. The other would help Arkansas’s families and parents of kids across the country make ends meet in a time of rising prices.
The problem is lawmakers are pushing one of these proposals – the tax cut for corporations – toward passage, while support for families that would put an entire generation of kids on an upward trajectory is mired in the Congressional mud.
It’s time to put people, not corporations, first: Congress should not put corporate tax interests above kids, families, and workers with low-paying job.
Let’s remember where we are: As 2021 turned into 2022, Congress allowed temporary improvements to the Child Tax Credit, or CTC, expire. That caused the expanded CTC to be taken away from families representing 661,000 kids in Arkansas, who relied on that money to pay for education costs and basic needs so they could work and raise their kids. This crucial income was taken away just as inflation, largely caused by ongoing supply issues and geopolitical crises like Russia’s invasion of Ukraine, spurred price spikes for essentials like gas, groceries, and more.
The Child Tax Credit expansion reduced child poverty nationwide by more than 40 percent. The greatest driver of these poverty reductions was the expansion of eligibility for kids from families with the lowest incomes (those families who need help the most but were locked out of the old CTC). There was also a substantial increase in the overall size of the credit. These improvements were a game-changer, providing financial stability for millions of children in families with low incomes.
We have a responsibility to make sure all kids have what they need right now and in the future. Without Congressional action, we are at imminent risk of losing those gains, with millions of children consigned to poverty, and the long-term harms to health, school performance, and even long-term earning potential that result from growing up poor.
Both expansion of the Child Tax Credit and the corporate tax cut – an extension of a Trump-era tax write-off for expenses related to research and experimentation, or “R&E” – have been part of an overall tax policy reform package approved by the House last year as part of the “Build Back Better” plan. The plan would have raised revenue needed to fund meaningful investments in climate change and support for families — in part by closing loopholes that let corporations avoid paying their taxes, even as it contained pro-corporation policies like the R&E tax credit.
Corporate lobbyists have been working overtime to separate the fate of this corporate tax cut from the fate of programs that support families. This write-off would cost roughly $150 billion over a decade if made permanent, according to the Congressional Budget Office.
They’re close to getting their wish: Lawmakers from both parties are pushing to pass the R&E corporate tax cut alone, either as part of a reconciliation bill that can pass with 50 votes or as part of the COMPETES Act, bill to improve the United States’ international competitiveness. This would give corporations their big tax cut while doing nothing for families or workers with low-paying jobs: No extension of the Child Tax Credit – or, for that matter, needed improvements to the Earned Income Tax Credit, which helps workers with low-paying jobs make ends meet.
Arkansas Advocates for Children and Families has urged Arkansas’s congressional delegation to help pass an economic package that helps Arkansans make ends meet, reduces poverty and racial and economic disparities, and lays the groundwork for long-term recovery and prosperity even after the COVID crisis is in the rear-view. Now, we’re also urging them to say “NO” to any new corporate tax cuts that would be passed without also expanding the CTC, at the very least by expanding eligibility to kids from families with little to no income who most need the boost. It’s time to put people first.