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Pro-worker credits are in jeopardy
Wesley Tharpe
Wesley Tharpe is senior policy analyst for the Georgia Budget and Policy Institute, - photo by File photo

Congress made Labor Day a federal holiday in 1894 to honor the contributions workers make every day to our nation’s strength, prosperity and well-being. But in 2015, on a day when we will celebrate the value of work, it’s distressing that two of our nation’s best policy tools for encouraging and rewarding work are in jeopardy: the federal Earned Income Tax Credit and the Child Tax Credit. If Congress doesn’t act soon, Georgia workers from all walks of life stand to lose.

What exactly are these credits? In simple terms: If you are a worker who has a job but doesn’t make a lot of money, you’ll get some of your earned income back as a federal tax credit — the EITC — at the end of the year. If you’re a worker with children, you may also be eligible for a CTC to help with the costs of raising your children.

These people work at coffee shops, at construction sites, in day-care centers and nursing homes. Most of these jobs don’t pay much, and workers can struggle to get ahead even when they put in long hours. The U.S. median wage is $9.20 an hour for workers in food service, $14.20 for transportation and warehouse workers (including truck drivers) and $12.71 for health-care support staff, such as home health aides.

The tax credits help many of these workers afford the basics and pay for things like child care and transportation that allow them to keep working toward the middle class. But key portions of the credits are scheduled to expire soon. If our representatives in Washington allow that to happen, more than 50 million Americans — including 25 million children — in working families will lose all or part of their credits.

The losses would hit all kinds of workers in Georgia, according to new research by the Center on Budget and Policy Priorities. An estimated 96,800 office administrators, 93,800 salespeople and 71,400 manufacturing workers in Georgia — to name a few occupations — stand to lose some or all of their tax credits. So would about 70,500 construction workers, 46,800 health-care employees and 33,500 people in educational jobs.

All told, an estimated 639,000 Georgia families, including nearly 1.2 million children, could lose all or part of their credits. To put the losses in perspective, a single mom who works full time at the minimum wage of $14,500 per year would lose her entire child credit of $1,725. Many married couples would face higher marriage penalties and cuts to their EITC, and larger families would face  cuts in their EITC as well.

Congress can seize the opportunity to save the credits this fall, before the 2016 election grinds the congressional calendar to a halt. Lawmakers are scheduled to consider a range of federal tax changes when they return to work this month, and that window is the last best chance to address these pro-work credits.

I can think of no better way to honor the purpose of Labor Day than for Georgia’s congressional delegation to make the EITC and CTC central to this fall’s tax debate. Making key provisions of the credits permanent would reward the sometimes back-breaking effort of Georgia workers, help children succeed and make a brighter future possible for thousands of families. It’s the right thing to do, and it’s time for Congress and the president to make it happen.

Tharpe is senior policy analyst for the Georgia Budget and Policy Institute, an independent think tank that analyzes budget and tax policies and aims to inspire responsible decision-making.

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