President Obama’s Tax Credit Proposals Would Help Over 750,000 New Jerseyans
FOR IMMEDIATE RELEASE: March 5, 2014
Contact: Jon Whiten, email@example.com or 609-393-1145 ext 15
President Obama’s budget includes several important improvements to the pro-work Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) that would impact more than 750,000 low-wage New Jersey workers. The tax-credit changes would reduce poverty among low-wage workers and their families, reduce income inequality, strengthen work incentives and give a boost to New Jersey’s economy. (Click here for a Fact Sheet detailing how the proposed changes would impact the state.)
“The president’s call to strengthen tax credits for low-income workers across the country is a no-brainer,” said New Jersey Policy Perspective president Gordon MacInnes. “But the need for these enhancements is even greater in a high-cost state like New Jersey, where many of these workers should be climbing into the middle class but instead are barely surviving.”
Expanding the now-tiny Earned Income Tax Credit (EITC) for working childless adults and non-custodial parents (“childless workers”), an idea that has growing support across the political spectrum, would help 350,000 New Jerseyans.
Currently, a childless adult working full time at the minimum wage pays significant federal income and payroll taxes, but receives an EITC of less than $30, enough to barely hold on – if that ¬– in high-cost New Jersey. As a result, childless workers are the sole group of workers that the federal tax system taxes into — and in many cases, deeper into — poverty.
For families with children, by contrast, the EITC, when combined with the CTC, is our most powerful anti-poverty tool. On average over 2010 to 2012, the two credits lifted 214,000 New Jerseyans, including 110,000 children, out of poverty each year.
The President’s proposal also will significantly 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. Last year, 442,175 children in 218,863 New Jersey families benefited from these improvements that in the four previous years lifted an average of 33,400 New Jerseyans, including 19,600 children, out of poverty each year.
“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,” MacInnes said. “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 New Jersey’s future,” he added. “Meanwhile, New Jersey’s policymakers should follow their lead and restore the 20 percent cut in New Jersey’s state EITC fully and immediately; this 2010 cut has resulted in a loss of over $200 million in important tax credits for half a million New Jersey working families.”
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