Almost every Republican member of Congress has signed the pledge to “oppose any and all efforts to increase the marginal income tax rates for individuals.” Unless, that is, the taxpayer happens to be a parent working for low wages and barely hanging on. Then, those same Congressional Republicans would effectively raise taxes on over 200,000 working families in New Jersey by $213 million in 2013 alone, according to NJPP’s analysis of new figures released by Citizens for Tax Justice.
The GOP plan would extend the Bush cuts for the wealthiest Americans but would allow crucial tax credits for working families to expire, eliminating over $11 billion in tax relief for 13 million working families with 26 million children nationwide.
The tax credits for working families, which were enacted in 2009 and later extended through 2012, include expansion of the child tax credit and the Earned Income Tax Credit (EITC). New Jersey’s working families will receive a double whammy if the federal EITC is reduced, since our state EITC piggybacks on the federal amount and would therefore decline proportionately – just two years after the Christie administration already cut the state’s benefit level by 20 percent.
If the Republican plan goes into effect, 218,863 New Jersey families with 442,175 children will lose $201 million in federal tax credits and $12 million in state tax credits next year. The average federal benefit each family stands to lose is $918 a year.
These sacrifices by struggling families would help finance the continuing tax cuts of families earning more than $250,000. Ronald Reagan, the patron saint of the modern Republican party, was an enthusiastic supporter of EITC. He might wonder what has happened to his party.
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