The Senate is expected to take up tax legislation this month that is crucial to the middle class. A bill to cut middle class taxes could be introduced as early as this week. We at Arkansas Advocates for Children and Families are primarily interested in three areas:
- Keeping the middle class tax cuts enacted in 2001 and 2003
- Keeping the extended refundable Child Tax Credit
- Keeping the Earned Income Tax Credit “marriage penalty” fix
AACF strongly supports permanent extension of tax cuts passed in 2001 and 2003. As a matter of attacking the deficit, we also strongly support returning the top two marginal rates to the levels seen during the Clinton Administration.
The refundable Child Tax Credit (CTC), a very important aid to middle-class families, provides for a tax credit of up to $1,000 for each child in the family. This credit, though, is based largely on a family’s income-the more a family works the more likely they are to claim the full credit. In 2009, Congress lowered the threshold income to $3,000 in order to claim partial credit, and this threshold is set to expire at the end of the year. We strongly support a permanent extension of this credit at this level.
The Earned Income Tax Credit (EITC) is available to low-income, working individuals and families as an offset to taxes owed. Congress made reforms in 2009 that provided up to $600 more to families of three or more children. The reform also lessened the degree of the “marriage penalty,” a reduction in benefits for a low-income individual who marries. This reform, too, is set to expire at the end of the year, and we would like to keep the credit at its current level.