Cummings, Warren Issue Staff Report Finding Expiration of Critical Tax Credits Could Push Hundreds of Thousands of Maryland Residents into Poverty

December 3, 2015
Press Release

Washington, D.C. (Dec. 3, 2015) — Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Senator Elizabeth Warren issued a staff report on the benefits of the child tax credit (CTC) and the earned income tax credit (EITC) for Maryland families.  The staff report warns that unless Congress acts, the expiration of these tax credits will push millions of American families nationwide, and thousands in Maryland, into poverty.

“Every child deserves an opportunity to grow and flourish, but childhood poverty robs millions of American children of that opportunity,” Cummings said. “If Congress is going to give Wall Street billions of dollars in tax breaks, we have the moral obligation to also make permanent the expanded child tax credit and earned income tax credit, which lift millions of American families out of poverty every year. In Maryland alone, the expiration of these tax credits could push 114,000 children into poverty.”

“It is shameful that in 2015, in the richest country on Earth, millions of kids are growing up in abject poverty. ... but we know how to give these children a better start in life,” said Warren. “We hand out tax breaks to big corporations nearly every year, because Washington works great for these big corporations. But millions of working Americans will be plunged into poverty if we don’t extend their tax breaks too. Congress should make tax breaks for working families permanent – and it should expand them – before committing to any package of corporate tax giveaways.” 

Key findings of the report include:

     •    Tens of thousands of Maryland families and children are at risk of losing tax credits: Statewide, 158,000 families and 315,000 children are at risk of losing tax credits if key provisions in the EITC or CTC expire. The expiration of these tax credits could push 243,000 people – including 114,000 children – into poverty in Maryland alone.

     •    Cuts will cost middle- and low-income families with children the equivalent of months’ worth of groceries, utility bills, or car repairs: If the tax credit provisions expire, the average Maryland family that currently receives the benefit will lose about $1,200 a year. That’s enough for a single mother with two children to buy about nine weeks’ worth of groceries, cover the cost of needed car repairs, or pay about four months’ worth of utility bills. 

     •    Cuts will hurt the Maryland economy: Statewide, the expiration of these tax credits would mean a loss of $189 million that would have been spent in local businesses, helping to create jobs and drive economic growth throughout the region. Lost tax credits by region would include:
          •    $162.3 million in the Washington, D.C. metro area 
          •    $87.5 million in the Baltimore-Columbia-Towson metro area 
          •    $16.4 million in the Salisbury metro area 
          •    $9.9 million in the Hagerstown-Martinsburg metro area 
          •    $2.7 million in the California-Lexington Park metro area 
          •    $3.5 million in the Cumberland metro area 
          •    $5.5 million in the non-metro areas of the state 

     •    Expanding the Earned Income Tax Credit would help 146,000 Maryland families and individuals, and boost the local economy by another $88.1 million: In addition to preventing the expiration of important tax credits, Congress has the opportunity to go further and expand the EITC for low-income workers. 

Cummings and Warren issued the report today at a Middle Class Prosperity Project forum titled, “The Effects of Poverty On Children’s Opportunities.”

At the forum, Cummings and Warren were joined by several of America’s leading experts on poverty to discuss what it means for children to be poor in America today; the structural, social and economic factors that keep children and families in poverty; the unique and powerful role played by safety net programs in reducing poverty; and the importance of strengthening those programs as our economy recovers from the worst recession in decades.

Cummings and Warren were joined at the forum by Sister Simone Campbell, the Executive Director of NETWORK; Kathryn Edin, Bloomberg Distinguished Professor in Sociology and Public Health at Johns Hopkins University and co-author of $2 a Day: The Art of Living on Virtually Nothing in America; and Robert Greenstein, President of the Center on Budget and Policy Priorities.

“We need to transform our economy to prioritize the common good and support our people,” Sister Simone Campbell said. “The Earned Income Tax Credit and Child Tax Credit need to be made permanent and expanded. We need living wages so that our people have enough to get by...We need Congress to strengthen programs that are designed to help hardworking families and individuals.”

“In any given month roughly 1.5 million families with 3 million children were living on cash incomes so low—and in a poverty so deep—that we didn’t even think it existed in America—up 130 percent from just 15 years earlier. ....the ranks of the $2 a day poor show no signs of depleting, despite the strengthening economy,” Kathryn Edin said. “How should we respond to the plight of the $2 a day poor? ... First, give all the opportunity to work. … Second, all parents deserve the opportunity to raise their children in a place of their own. … Third, sometimes work won’t work, and we need a safety net that can truly catch poor families when they fall.”

Click here to read the full report for the state of Maryland. 

Click here to read the reports for all 50 states.