Leaders Unite Opposing Plan to Tax Poor Children
Ed Walz (Former Staff)Children of Immigrants Poverty & Family Economics Tax Policy
Washington – Leading voices for children, working families, Latinos, and immigrants united today, urging Congress to reject a proposal that would deny 5.5 million children the Child Tax Credit.
The proposal, offered as a fiscal offset by U.S. House of Representatives negotiators on the payroll tax holiday extension bill, would deny the Child Tax Credit to children whose parents file federal income tax returns using an Individual Tax Identification Number (ITIN). If enacted, it would deny the credit to more than 5.5 million children, four-out-of-five (4.5 million) of whom are U.S. citizen children.
“It is sad that our nation has arrived at the point where we are considering sacrificing the well-being of poor and vulnerable children to pay for our tax breaks,” stated Kevin Appleby, Director of Migration and Public Affairs for the U.S. Conference of Catholic Bishops.
One-in-five children in America (22%) lives in poverty, according to the latest U.S. Census Bureau data – a 20-year high. But poverty is much higher among Latino children: one-in-three Latino children (37%) is poor. Approximately 80 percent of families that would be affected are Latino.
“The elimination of the Child Tax Credit for ITIN filers punishes the most vulnerable segments of our community at the worst possible time,” said Gustavo Torres, Executive Director of CASA de Maryland “Given the economic recession has disproportionately impacted the employment sectors traditionally relied upon by the Latino and immigrant community, this could have a devastating blow on hard-working immigrant families struggling to make it through another month of expenses.”
The Child Tax Credit has proven effective in protecting children from poverty. In 2009, the Child Tax Credit kept the families of more than 1.3 million children above the poverty line. The credit is particularly important for the children of ITIN filers, as their average family income of $21,000 is already below the poverty line (about $22,300) for a family of four. The average child affected by this proposal would lose an estimated $1,800 in family income – more than enough to cover a month’s rent or several months of groceries.
“As a nation we must invest in our children to enjoy future prosperity. Unfortunately, current Congressional attempts threaten to undercut these important investments. We urge Congress to stand up for our children and reject any attempt to strip $1,800 from the pockets of working families at a time when every penny counts,” affirmed Marielena Hincapié, Executive Director of the National Immigration Law Center.
Advocates for America’s Latinos also observe that the proposal comes at a critical moment, as candidates of both parties seek to win the support of Latino voters. The National Council of La Raza (NCLR) reported in 2010 that there were 20 million eligible Latino voters in America and that voter turnout in the 2008 presidential election increased at twice the rate of increase among Blacks and more than 50-times the rate of increase among Whites.
“We are outraged that this proposal is even on the table,” said Eric Rodriguez, NCLR Vice President. “Latino voters are paying close attention to how policymakers treat our community. Given that one out of every four Latino children would face greater hunger and poverty as a result of this proposal, it is hard to see it as anything less than an attack on our children. Congress should pass a fair tax package that maintains access to the Child Tax Credit for vulnerable families.”
Congress has numerous alternatives to offset the budgetary impact of extending the payroll tax holiday. For example, requiring millionaires to pay just 0.2% more in federal income taxes would generate the same offset as denying the Child Tax Credit to 5.5 million children.
“The bottom line for children’s advocates is that it’s wrong to target any child, especially when child poverty’s already at the highest level in a generation. This proposal targets millions of the most vulnerable children in America and threatens to drive child poverty even higher,” stated Bruce Lesley, President of the First Focus Campaign for Children. “And our message to members of Congress: find a smarter solution, and don’t cut kids.”
While most tax filers use a Social Security Number (SSNs), millions of filers use ITINs because they are ineligible for SSNs. Immigrants and nonimmigrant visitors – those admitted through normal channels and those present without documentation – may use ITINs to pay federal income taxes. President George W. Bush’s U.S. Internal Revenue Service Commissioner testified to Congress that undocumented immigrants paid nearly $50 billion in federal income taxes using ITINs, during an eight-year period ending in 2003. The American Immigration Council reports that ITIN filers’ paid more than $9 billion in payroll taxes (which fund Social Security and Medicaid systems for which undocumented immigrants are ineligible) during 2010.
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The First Focus Campaign for Children is a 501(c)(4) nonprofit organization affiliated with First Focus, a bipartisan children’s advocacy organization. The Campaign for Children advocates directly for legislative change in Congress to ensure children and families are a priority in federal policy and budget decisions. For more information, visit www.ffcampaignforchildren.org.