Tax Plan Hurts Single Mothers and Working Families Most
I've said it before but it bears repeating - working ourselves out from under the rubble of this recession won't happen if we attempt to step on the more vulnerable members of society in the process.
Senate Minority Leader Mitch McConnell is proposing to do just that with his tax bill, introduced on September 13. His proposal extends the Bush-era tax cuts - all of those most beneficial to the highest-income earners in the nation - while forgoing those tax cuts which would most help lower income families, especially single mother-led households.
According to the National Women's Law Center, McConnell's bill does not renew the improvements to the Child Income Tax Credit (CTC) or the Earned Income Tax Credit (EITC) - both of which were approved by Congress in 2009 and expire at the end of the year.
“The McConnell plan is insulting to women,” said Nancy Duff Campbell, NWLC Co-President. “Over thirty percent of single moms struggling to support their families will get absolutely nothing, while millionaires will get average tax breaks of over $100,000 next year.”
The CTC is an income tax credit for families with children, though the majority of the cuts to this program would affect low-income families. The EITC is specifically for lower to moderate income workers. Women make up 52% of the workforce, currently, and one-third of women are the sole wage-earners in the family. Single mothers and their children are the ones most at risk of winding up in poverty in this country. Yet, while we attempt to revive our ailing economy, we slash those benefits that benefit the largest percentage of Americans who most need help. In fact, notes the NWLC, under the McConnell bill, 30 percent of single mothers would get nothing.
For a single mom with two children, working full-time at the minimum wage for $14,450, McConnell’s exclusion of the Child Tax Credit improvement would means a loss of nearly $1,500 from this credit. For a single mom with slightly lower earnings of $12,500, McConnell’s bill would mean she gets nothing from this credit.
Yet those who earn over $1 million would see a $104,000/year tax break - not including other tax cuts from the permanent estate tax reductions in the McConnell bill.
It's not only single mothers who will be irreparably harmed by this proposal. Notes the NWLC analysis,
Jane and Eric, a married couple who both work full-time at minimum wage jobs, support their three children with their combined annual income of $28,900. Under the McConnell bill, their CTC [Child Tax Credit] will drop from $3,000 to $2,408, a loss of $592.
Jane and Eric would lose $1,059 under the McConnell bill, in addition to their $592 loss from the CTC, for a combined loss of $1,651 in tax credits.
McConnell's tax bill would strip millions of low to moderate income Americans of those tax credits they rely upon to help support their families, resulting in billions of dollars of loss.
Alternatively, President Obama's tax plan would extend the CTC and EITC improvements but also extend teh Bush-era tax cuts to individuals with incomes below $200,000 and couples with incomes below $250,000, while, notes the NWLC "allowing tax cuts that benefit the top two percent of taxpaying households to expire." Still, his plan would also allow millionaires to receive more in tax cuts than middle-class families would.
To read the analysis, click here (PDF).
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