Letter to support extension of 2009 improvements to EITC and Child Tax Credit
December 14, 2012
The Honorable Sherrod Brown
United States Senator
713 Hart Senate Office Building
Washington, DC 20510
Dear Senator Brown:
The Ohio CASH coalition and our partners are writing this letter to ask that you the support extension of the 2009 improvements to the Earned Income Tax Credit and the Child Tax Credit. These refundable tax credits reduce poverty for Ohio working families and stimulate our economy. Ohio families claiming the EITC and CTC include our nurses, teachers, soldiers, waitresses, cashiers, and thousands of other working parents who need help covering the basics.
Ohio CASH, a project of Policy Matters Ohio, is a collaborative hub for asset building, income security, and consumer protection research and outreach. The overall goal of Ohio CASH is to improve the financial and economic conditions for low‐ and moderate‐income families and communities.
The EITC and the CTC are not the only things that matter in the negotiations toward a budget deal, as you well know. Raising revenue from those most able to pay, preserving middle class tax cuts, assuring the extension of federal unemployment benefits, and keeping in place spending that supports our communities and economy are also crucial. But for this coalition, these two important tax credits also deserve special mention.
Cutting the EITC and the CTC expansions would increase poverty in Ohio. In 2010, 979,000 low-income households benefitted from the EITC and 665,000 low-income households benefitted from the CTC in Ohio. Both of the tax credits were responsible for annually lifting 134,000 Ohio children out of poverty between 2009 and 2011. The Center on Budget and Policy Priorities found that if the 2009 refundable tax credits are not expanded, a single mother of two children earning $14,500 per year would see her CTC go down from $1,725 to $165. The loss of over $1,500 would be a tremendous hardship for a family already struggling to take care of its basic needs, and children would bear the brunt of those cuts.
Cutting the EITC and the CTC would hurt Ohio’s economy. Our state economy was stimulated by the $3 billion in EITC and CTC refundable tax credits Ohio families received in 2010. Many families put their refund directly back into Ohio’s economy to pay for basic needs like food, housing, childcare and transportation. The Congressional Budget Office reported that low and moderate income families are more likely to engage in the type of consumer spending that spurs economic growth from tax changes, than higher income families whose spending habits seldom change with additional tax credits or refunds. Extending these tax credits would benefit 1 million Ohio children, providing an average benefit of $876 per family. Ohio’s families and local economies need that $467 million as we recover from the recession.
We ask that you protect Ohio’s low- and moderate-income working families and extend the 2009 EITC and CTC expansion. One of the guiding principles of the Bowles-Simpson deficit reduction plan was that no proposal should worsen poverty or suppress economic opportunity. Not continuing the 2009 tax credit expansions would do both. As the economy recovers, Ohioans need these tax credit improvements to reduce poverty and keep our economy growing.