New Jersey Newsroom

267,000 Low-Income N.J. Families Could Lose Tax Relief

Credits expire at end of year without action by Congress

New Jersey Newsroom — Thursday, September 16, 2010


At least 267,000 New Jersey families stand to lose $235.5 million in low-income tax credits if Congress fails to extend tax relief, a report made public Thursday by the National Women's Law Center and New Jersey Citizen Action maintains.

Congress will soon decide which federal income tax provisions that expire at the end of the year should be renewed and which should be allowed to expire. The credits include tax cuts enacted in 2001 and 2003 and improvements to the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) that were included in the American Recovery and Reinvestment Act of 2009.

Ev Liebman, Citizen Action's director for organizing and advocacy, said in Highland Park, "The Earned Income Tax Credit and Child Tax Credit combined reach hundreds of thousands of New Jersey residents, and are worth approximately $235.5 million to lower income working parents in New Jersey.
"There is no way to overstate how important these tax credits are to New Jersey families," Liebman said. "For example without the CTC and EITC proposals, 23 percent of single parent households or those families making less than $13,000 a year will not receive any tax relief for the tax year 2011. Working parents who take these tax credits need every break they can get, especially in difficult economic time

"Contrast that with proposals to extend the ineffective tax cuts for the wealthiest which carry a price tag of nearly $40 billion in 2011 alone," Liebman said. "Analysis by the nonpartisan Congressional Budget Office and many economists indicates that extending the top tier tax cuts would do little to stimulate the economy — generating 40 cents or less in GDP growth for every government dollar spent — because the wealthiest tend to save rather than spend. The revenues produced by allowing these cuts to expire could be used for measures that more effectively create jobs, spur economic growth, and provide immediate assistance to vulnerable women and families.

Liebman concluded, "Now that Congress is returning to work, we urge the members of New Jersey's Congressional delegation to immediately address the Bush era tax breaks set to expire at the end of 2010. The number of families that are helped in New Jersey is a compelling reason for Congress to act now. They should move to preserve desperately needed tax relief for working families and the middle class and end inefficient and costly tax breaks for the wealthiest."

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