Issue Spotlight: Two Critical Tax Credits for Working Families in Jeopardy
Congress may soon act on a long-term deficit reduction plan that could mean deep cuts to tax credits for working families — including the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). The budget passed by the U.S. House in March 2013 would let improvements to the EITC and CTC enacted in 2009 expire and requires billions in new spending cuts that Congress would likely take from the refundable portion of the tax credits.
HARRISBURG, Pa. (Feb. 18, 2015) – The Better Choices for Pennsylvania Coalition released today a list of 19 recommendations to make Pennsylvania’s tax system fairer. State and local taxes require low- and middle-income workers to pay more of their income in taxes than the highest-income Pennsylvanians, making it hard to raise sufficient funds for public schools, higher education, health care and other vital services.
HARRISBURG, Pa. (Jan. 14, 2015) – Pennsylvania’s ranking worsened on a biennial report card measuring the fairness of state and local taxes, according to a study released today by the Institute on Taxation and Economic Policy and the Pennsylvania Budget and Policy Center.
Middle-income Pennsylvanians pay two times more in taxes as a share of income than the wealthiest earners, and the lowest-income earners pay three times more, the study found. Pennsylvanians in the top 1 percent of income actually saw a slight drop in the share of income they pay in taxes, from 4.4 percent in 2013 to 4.2 percent in 2015.
Budget Secretary Charles Zogby confirmed during his final mid-year budget briefing that Pennsylvania will face a $2 billion budget gap next year. After balancing the 2014-15 spending plan with one-time resources, Secretary Zogby acknowledged that crafting a 2015-16 budget will be difficult for the next administration. This sentiment echoes what the Independent Fiscal Office (IFO), bond-rating agencies, and others (including we here at PBPC) have been saying for months.
The Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC), however well-intentioned, divert desperately needed funds from Philadelphia public schools ("Scholarships offer lifeline to Pa. students," Oct. 10).
With the deadline for filing state and federal tax returns upon us, the Pennsylvania Budget and Policy Center has put together the following resources to help you understand what your tax dollars support and why it is so important that we close corporate tax loopholes at the state and federal level.
With Mother’s Day this Sunday, PBPC and Public Citizens for Children and Youth are highlighting new research showing that 670,000 working moms in Pennsylvania benefit from the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).