After a year of fighting hard to protect the wealthy from tax increases, the House Republicans have settled on a plan to raise taxes on the working poor. To offset the cost of extending unemployment benefits, the Republicans propose to deny approximately two million immigrant households the opportunity to claim the Additional Child Tax Credit (ACTC) when they pay their taxes.
This would be a dramatic and devastating change to federal law. Under current law, immigrants – regardless of their status – are legally compelled to pay federal income and payroll taxes. Taxpayers ineligible for a Social Security Number (SSN) file their taxes using an Individual Tax Identification Number (ITIN). In 2010, the federal government collected over $9 billion in payroll taxes associated with ITIN tax returns.
The Child Tax Credit and the refundable Additional Child Tax Credit were enacted to alleviate the burden that federal payroll and income tax payments impose on low and moderate income families with children. The goal is to enable working families to financially care for their children. The child tax credits mitigate child poverty. According to the Center for Budget and Policy Priorities (CBPP), the CTC and ACTC protected approximately 1.3 million children from falling into poverty in 2009.
The harm from restricting eligibility to the ACTC will hit up to four million U.S. citizen children who live with undocumented parents. And although the parents may not be eligible for a SSN, they are taxpayers who contribute to the economic well-being of our country, and whose tax payments bolster the Social Security and Medicare systems that benefit all of us – although not themselves.
If this provision becomes law, the financial stakes could not be higher for the more than two million already struggling families, including millions of children. A typical family could suffer a loss of 10 percent of their disposable income due to this tax hike. This tax increase will increase hunger and homelessness, destabilize families, severely impact communities, and further hinder economic recovery.
Don’t let this happen! Call Senate Majority Leader, Harry Reid, (202) 224-3542, and House Minority Leader Nancy Pelosi, (202) 225-0100, and ask them to fight against measures that would hurt children and their families!
Courtesy National Immigration Law Center