The working families of Santa Fe and the nation are the backbone of our economic and cultural identity. Working families are so essential that our city, state and nation have created public policies and programs designed to help them to survive.
The federal Earned Income Tax Credit and Child Tax Credit are just such tools. Both programs encourage low- and middle-income people to work even when their jobs pay too little to live on. These tax-credit programs also keep millions of children out of poverty each year, building a stronger future for our next generation.
The Earned Income Tax Credit for low-income working individuals and families is a refundable federal income tax credit. It has received bipartisan support ever since Congress passed it in 1975. The EITC is designed to "make work pay" by decreasing the impact of taxes that low-wage workers pay on their earnings and by supplementing their wages.
The intention is to move a family with a full-time minimum-wage worker above the poverty line. The EITC is the largest poverty-reduction program in the U.S. and, in 2009, it was expanded as part of the American Recovery and Reinvestment Act to provide more help to low-income families with three or more children, and to married couples with children. In 2009, the EITC lifted 6.6 million people out of poverty, half of them children!
The Child Tax Credit is designed to lessen the impact of income taxes for families raising children. Again, as part of the American Recovery and Reinvestment Act of 2009, the CTC was improved to increase the refundable portion of the credit, helping 13 million low-income children and families.
As a nation, we are right to invest in tax credits for working families. The EITC and CTC (and the improvements to them enacted last year) have been essential in helping families get back on their feet, especially in these tough economic times.
Beyond helping individual families, EITC dollars are helping to get our economy moving again. In 2007, in
the Santa Fe area alone, 11,000 households claimed the EITC, thus bringing
$29 million into our Santa Fe economy (www.brookings.edu). As many of us know, the dollars received by working families go right back into the Santa Fe and New Mexico economies.
The 2009 improvements to the EITC and CTC are due to expire at the end of 2010. If the 2009 changes are allowed to end, thousands of working families in New Mexico will be put in financial jeopardy. In our state, 177,000 children would receive a smaller Child Tax Credit, and 78,000 people would receive less EITC. At a time when Santa Fe's economy is just starting to show some positive improvement, removing these benefits to our working families makes no sense at all.
We urge Sen. Jeff Bingaman, Sen. Tom Udall and Rep. Ben Ray Luján to protect and strengthen the public investments we've made on behalf of working families. We request that, upon their return to Congress, they support making the 2009 improvements to the EITC and CTC permanent, and to work to get legislation passed before the election. It's time we reaffirm our commitment to real family values!
Kathryn C. Sherlock and Lydia Pendley are co-group leaders of RESULTS-Santa Fe. RESULTS is a 30-year-old national grassroots volunteer organization committed to creating the political will to end hunger and poverty around the world.
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