New Census Data on Poverty Shows Impact of Refundable Tax Credits
By Devin Simpson
Anti-poverty programs like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) lifted millions of Americans out of poverty in 2018, new data from the U.S. Census Bureau shows.
The Census Bureau released their annual report, Income and Poverty in the United States: 2018, which presents data on the state of poverty throughout the country. The report found that the official poverty rate fell for the fourth consecutive year from 12.3 percent in 2017 to 11.8 percent in 2018. The accompanying Supplemental Poverty Measure shows that anti-poverty programs played a key role in increasing economic stability for millions of Americans. In particular, refundable tax credits like the EITC and CTC lifted 7.9 million people out of poverty and reduced the severity of poverty for tens of millions more.
However, the Center on Budget and Policy Priorities (CBPP) warned that despite the progress made, the social safety net is at risk under policies proposed and supported by the Trump Administration. Policies such as the “public charge” rule — which would alter how receiving public benefits factors into decisions concerning immigration — risk reducing participation in refundable tax credit programs by low-income families that need it most.
CBPP highlights the proposed Working Families Tax Relief Act as one opportunity for Congress to build on this progress and expand the social safety net instead of shrinking it. The policy would drastically strengthen the EITC and CTC and increase incomes for about 46 million households, lifting an additional 10 million people out of poverty.
To learn more, read the full report here.