Warren, Cummings press for family benefits in package of tax breaks
Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) called on Congress Thursday to make a set of benefits for low-income families permanent as part of massive package of year-end tax breaks currently in the works.
The liberal stalwarts are looking to cement the Earned Income Tax Credit and the Child Tax Credit, as Democrats and Republicans are negotiating a deal on temporary tax provisions known as “extenders.” A deal would appeal to Democrats by making permanent the EITC and CTC expansions and appeal to Republicans by solidifying business tax breaks that expired at the end of 2014.
“As we speak, Republicans in Congress are considering spending billions of dollars on dozens of tax breaks for businesses, including one give-away to Wall Street that costs $13.4 billion alone,” Cummings said at a forum on the effects of poverty on children’s opportunities. “If big business gets tax breaks, low-income Americans deserve a break too.”
Warren said that the EITC and CTC “are doing more to reduce child poverty than any other federal program.”
She also called for indexing the CTC to inflation, saying that because the credit hasn’t been indexed, its value has eroded.
Many Republicans are only interested in sealing the EITC and CTC expansions if changes are made to the programs to reduce fraud. An analysis found that as much as one-quarter of payments of these credits may be made improperly.
But Robert Greenstein, president of the Center on Budget and Policy Priorities, said at the forum that that estimate may be too high and is an error rate rather than a fraud rate.
Also Thursday, Warren and Sens. Tammy Baldwin (D-Wis.), Jack Reed (D-R.I), Sheldon Whitehouse (D-R.I.) and Angus King (I-Maine) sent a letter to the chairman and the ranking member of the Senate Finance Committee, calling for the extenders package to be partially offset by ending tax “loopholes” that benefit hedge fund managers and corporate executives.
“If Republicans believe that we must pay for sequester relief and offset these critical investments that support the middle class, then Republicans should also work with Democrats to close egregious loopholes to pay for extending expired tax cuts,” the senators said.
The group recommended that Congress consider offsetting the extenders package by closing “unfair tax loopholes.” Specifically, they called for ending the “carried interest” tax break, which benefits managers of investment funds, and tax deductions for executive compensation over $1 million. Two bills that address these topics have been estimated to raise a total of around $65 billion over 10 years, which could partially offset an extenders package that could cost hundreds of billions of dollars.
“We encourage you to consider closing these and other loopholes to both help pay for tax extenders and make our tax code more fair,” the senators said.