A proposed federal act introduced last week would “boost financial security” for more than a million Virginia families, according to a new analysis from the Commonwealth Institute for Fiscal Analysis.
The Working Families Tax Relief Act would expand both the Earned Income Tax Credit and the Child Tax Credit. Currently, more than 600,000 Virginia families receive the former, and more than 400,000 receive the latter, according to the left-leaning Richmond nonprofit. Both make a big difference to working families.
“Taken together, these two credits lifted over 200,000 people, including 100,000 children, out of poverty in Virginia each year from 2011 to 2013,” the institute states, adding that, nationally, the proposal would also lift 11 million children above or closer to the federal poverty level.
The act was submitted by a group of Senate Democrats, and has the support of Virginia’s senators, Mark Warner and Tim Kaine, both Democrats.
According to the Center on Budget and Policy Priorities, the act would expand the Earned Income Tax by about 25 percent for families with children, and make the Child Tax Credit fully refundable “so children in lower-income households, including those with little or no income, could benefit fully from it.”
The changes would have a huge impact on children in “deep” poverty, according to the center, meaning they live below half of the poverty line — making less than $11,000 a year for a family of three. Under the proposal, 1.3 million children would be lifted out of deep poverty.
The tax credit would especially benefit people of color. The Commonwealth Institute says since 2001, median real wages in Virginia for black and Hispanic workers have grown more slowly than for white workers.
The institute estimates that a single mom with two children would receive a $3,700 boost if she has a $20,000 income, while a family of four who make $45,000 a year would get $3,500 more.
Other versions of the Act have been submitted before, Politico reports, and six Democratic presidential hopefuls have signed on in support this year.