Category Archives: Taxes

Supporting Tax Policies that Benefit Women and Families

Supporting Tax Policies that Benefit Women and Families

Anna Chu and Jillian Edmonds
August 16, 2017

The Trump administration and Republican leaders in Congress have promised to release a tax reform plan this summer, which is likely to include some of the largest tax cuts in decades. As elected officials debate tax reform, we must ensure policies that slash taxes for the wealthy few and big corporations under the guise of growing the economy do not become the new law of the land. The fallacy that tax cuts for the rich and corporations grow the economy has been the conservative talking point since Ronald Reagan first touted trickle-down economics, and has been widely discredited.[i] But not only is President Trump sticking to the same failed playbook of the past, the tax principles he released in April lack some of most important tax strategies that would help working families. For example, his principles do not mention expanding the Earned Income Tax Credit (EITC), an effective anti-poverty program which would greatly benefit working women and families. In 2013, the EITC lifted 6.2 million people – including 3.2 million children – out of poverty (when taking into account the indirect employment and earnings effects of the EITC, this number nearly doubles).[ii]

Although there are reports that President Trump is considering improvements to the Child and Dependent Care Tax Credit, those potential improvements alone do not mitigate the other troubling aspects of his tax plan. For instance, President Trump proposes reducing the corporate tax rate by 60 percent and getting rid of the estate tax, which impacts only the richest 0.2 percent of estates (including his own estate).[iii] Coupled with his budget, which guts crucial programs that provide basic living standards to low-income Americans, what emerges is a clear picture of the Trump administration’s economic policy—giving big payoffs for the wealthy few and big corporations, while pulling the rug out from everyday women and their families.

Tax Cuts for the Rich Just Make the Rich Richer

President Trump’s tax plan would be a massive giveaway to wealthy Americans and big corporations, and would harm women and families if enacted into law. He proposes slashing the top marginal individual tax rate to 35 percent and consolidating the current seven tax brackets into three. He also proposes slashing the corporate tax rate to an astoundingly low 15 percent. While he claims that such tax cuts would grow the economy and “create 25 million new jobs over the next decade,” this couldn’t be further from the truth. A Congressional Research Service analysis of the top tax rates since 1945 found little or no association between reducing taxes on the wealthy and increased savings, investment, or productive growth.[iv] A review of research by the Center on Budget and Policy Priorities of the impacts of a 1993 tax hike and the 2001 tax cut also revealed that job creation and economic growth were actually stronger in the years after the 1993 tax increases than in the years following the 2001 tax cuts.[v]

Instead of creating jobs or economic growth, tax cuts for the rich just make the rich richer. An analysis of OECD countries found that there was no correlation between the top tax rates and economic growth, but there was a correlation between lower top tax rates and greater income inequality.[vi] The earlier CRS study also found that cutting the top tax rate concentrates wealth at the top of the income spectrum because it incentivizes higher pay at the top end of the scale and allows those people to keep more of that money. By cutting taxes for the wealthy and corporations, President Trump’s tax plan will contribute to growing economic inequality in our nation, which harms both our current economy and future growth.

Tax Cuts Threaten Funding for Critical Programs

While women and families likely won’t get a fair shake in this upcoming tax plan, it’s not their only worry. President Trump’s tax principles work alongside his federal budget, which would cut programs that provide a basic living standard to low-income families. His budget proposes eliminating heating assistance for people in poverty, funding for meals for seniors, and several housing assistance. These cuts will affect women the most, potentially creating an even greater poverty gap between men and women. The Tax Policy Center found that cutting the corporate income tax to 15 percent would cost $2.4 trillion 10 years — and that number skyrockets to $4 trillion if the 15 percent rate applies to pass-through income.[vii]

Unless the White House plans to simply increase the deficit, these tax cuts must be paid for somehow. The Trump administration has claimed it would pay for these cuts by raising tax revenue from other sources and from economic growth, but the budget shows they are more than happy to slash critical programs that provide a basic living standard for women and families. President Trump’s budget proposes dismantling Medicaid as we know it and cutting its funding above and beyond the cuts in the ACA Repeal Bill. SNAP funding would be cut by nearly $200 billion over the next decade – which would result in many states making it more difficult for families to get food assistance..

The President’s desire to give huge tax cuts to wealthy people such as himself and take away critical programs that are lifelines for many women and families flies in the face of what his voters wanted and is a recipe for economic disaster. We can learn from what happened in Kansas, where massive tax cuts enacted in 2012 led to decreased revenue, underfunded schools, and cuts to services. Massive budget cuts won’t make America great again – but they are likely to hurt many people.

A Tax Plan that Actually Helps Women and Families

Our tax policies should help the most vulnerable Americans by improving family tax credits and raising enough revenue for programs and services that support struggling families, rather than giving more tax cuts and loopholes to the wealthy and corporations. To have a tax plan that actually helps working women and families, President Trump and Congressional leadership should consider abiding by the following principles:

  • Don’t give more tax cuts for the wealthy and big corporations.They should pay their fair share in order to have a tax system that works for all of us.
  • Tax policies shouldhelp the most vulnerable now. Tax reform should preserve — and improve — tax credits like the Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Tax Credit that help families make ends meet.
  • Support progressive tax reforms that would raise needed revenue— and expand opportunity for a stronger future for everyone. Every year, special interest tax loopholes cost the federal government billions of dollars. That’s money that could be used to support struggling families and give them a chance for a better life.

A tax policy that supports women and children requires that everyone pays their fair share regardless of their income or political power. It allows the government to fully support families that need assistance when they are struggling, as well as fund public parks, clean air enforcement, and other government activities that benefit everyone. Rather than giving the wealthy and corporations the largest slice of the pie, a tax policy that supports women and children expands the pie for everyone, resulting in more opportunities that keep America great.


[i] CNN Money. “The ‘trickle down theory’ is dead wrong.” http://money.cnn.com/2015/06/15/news/economy/trickle-down-theory-wrong-imf/

[ii] Center on Budget and Policy Priorities (CBPP). “EITC Boosts Employment; Lifts Many More Out of Poverty Than Previously Thought.” http://www.cbpp.org/blog/new-research-eitc-boosts-employment-lifts-many-more-out-of-poverty-than-previously-thought

[iii] CBPP. “Repealing Estate Tax Would Provide Windfall to Heirs of Wealthiest Estates.” http://www.cbpp.org/research/federal-tax/repealing-estate-tax-would-provide-windfall-to-heirs-of-wealthiest-estates

[iv] Congressional Research Service. “Taxes and the Economy: An Economic

Analysis of the Top Tax Rates Since 1945.” https://fas.org/sgp/crs/misc/R42729.pdf

[v] CBPP. “Recent Studies Find Raising Taxes on High-Income Households Would Not Harm the Economy.” http://www.cbpp.org/research/recent-studies-find-raising-taxes-on-high-income-households-would-not-harm-the-economy?fa=view&id=3756

[vi] Piketty, Thomas and Emmanuel Saez. “Top Incomes and the Great Recession: Recent

Evolutions and Policy Implications.” http://www.imf.org/external/np/res/seminars/2012/arc/pdf/PS.pdf

[vii] CNN Money. “A 15% corporate tax rate could be very expensive.” http://money.cnn.com/2017/04/24/news/economy/trump-corporate-tax-rate/

[viii] National Women’s Law Center. “Cutting Programs for Low-Income People Especially Hurts Women and Their Families.” https://nwlc.org/resources/cutting-programs-low-income-people-especially-hurts-women-and-their-families/

Originally published in Connection Magazine. Read the full issue here.

Getting Tax Reform Right for Our Nation

Getting Tax Reform Right for Our Nation

US Representative Mike Thompson (CA-05)
August 7, 2017

Economic inequality is a real problem that too many families face. Incomes have not kept up with the cost of living, and hardworking Americans are struggling to get by. So as Congress considers reforming our tax code, it must focus on leveling the playing field for the middle class and working families.

It’s been over thirty years since Congress made comprehensive changes to our tax code. A lot has happened in the interim—and our policies haven’t kept pace. We’ve seen the rich get significantly richer while the middle class keeps shrinking. Congress has the power and responsibility to change this trend. We can and should focus on reforms to create good, stable, high-paying jobs and help the men and women in our communities take advantage of the opportunities available to them now.

For instance, I’ve spoken with a number of my constituents who are trying to care for their kids, work a fulltime job, and go back to school so they can land a promotion or change careers. They are superheroes trying to do it all for their families, and they could benefit greatly if Congress expanded access to the American Opportunity Tax Credit, which helps millions of students and working families pay for college.

We should also look at policies that combat inequality. Expanding the Low-Income Housing Tax Credit, for instance, would provide more families with a place to call home. Improving the Child Tax Credit to keep pace with inflation would ensure families with young kids are able to pay their bills. I’ve co-sponsored legislation to expand all of these tax credits and provide additional help to everyday Americans.

These are not the only solutions, but they should be part of the discussion. Unfortunately, a number of my colleagues seem to think tax reform simply means tax cuts. That’s just not true.

It’s especially irresponsible to just cut taxes for the wealthiest among us—forcing everyday Americans to carry the bulk of our nation’s tax burden. Unpaid-for tax cuts create serious shortfalls, forcing our government to borrow more and more money. As lenders cut checks to federal borrowers, there could be less financing—and opportunities—available to entrepreneurs, mom-and-pop shops, and new startups. That’s bad for economy, American ingenuity, and anyone who wants to achieve their dreams.

We can make our tax code fairer, more competitive, and more efficient, but it shouldn’t come at the expense of a ballooning national debt. And Congress shouldn’t make promises it can’t keep.

While the corporate tax rate is in need of reform, simply slashing it to 15 percent is not going to help middle class families. It benefits big businesses that in some cases already pay less than their fair share in taxes while shipping jobs overseas. Tax cuts alone will not solve our problems. We need comprehensive reforms and programs that put people first.

We need to have the difficult conversations about what’s fair and what’s best for our communities. Tax reform isn’t easy, but it’s necessary if we want to close the wealth gap and help our families thrive.

Partisan rhetoric and ideology can’t be allowed to divide us. One party alone shouldn’t make changes to a tax code that affects all of us. We need to make sure we address the concerns of all our constituents, regardless of party.

As a senior member of the House Committee on Ways and Means, I’m ready to work with Chairman Kevin Brady and my colleagues on both sides of the aisle to make our tax code fairer. But make no mistake: Democrats will oppose any tax plan that only helps the rich get richer while forcing working families to shoulder even more of our country’s tax burden.

Originally published in Connection magazine. Read the full issue here

Blog: Secrecy Threatens Chance for Tax Justice

Secrecy Threatens Chance for Tax Justice

Colleen Ross
April 13, 2017

President Trump and Republican Congressional leadership have given themselves an August deadline to pass tax reform legislation. As that debate nears, it is unconscionable that President Trump continues to refuse to release his tax returns. We cannot have our elected officials passing laws that may personally enrich themselves or serve foreign interests without disclosing that information to the public.

We at NETWORK often say “the budget is a moral document” to advocate for funding federal programs that provide for the common good and work to mend the gaps. The reverse, however, is also true. The way we fund the budget, our tax code, is a moral declaration.

The tax code demonstrates what sources we decide to collect revenue from and their rates, as well as what escapes taxation. For an in-depth look at the individual, corporate, and other taxes used to raise revenue, read NETWORK’s guide “We the Taxpayers.” We cannot fund responsible programs – such as Social Security, Medicare and Medicaid, and SNAP (the Supplemental Nutrition Assistance Program) – without reasonable revenue, and equally important, that revenue must be raised through tax policies that are transparent, fair, and equitable. Ultimately, the tax code must not widen the income or wealth gap in our nation.

Much of our current tax code fails in that regard. Corporate tax loopholes and tax breaks for wealthy individuals have contributed to growing economic inequality in our nation over the years. Today, we are not mending the gaps with a progressive tax code, and signs of future tax reform do not look promising. House Speaker Paul Ryan’s “Better Way” plan proposed additional tax cuts that would disproportionally benefit the top 1%, while President Trump’s recently scrapped tax plan would also benefit our country’s highest-income households the most.

We understand that paying taxes supports our national interests and promotes the common good. As U.S. Supreme Court Justice Oliver Wendell Holmes, Jr. said “Taxes are what we pay for civilized society.” In the past, NETWORK members and friends have boldly proclaimed our Taxpayer Pride for government services ranging from student loans to public transportation.

This year, as we approach Tax Day, we call on President Donald Trump to have Taxpayer Pride and to release his tax returns. We also urge the president and members of Congress to support tax reforms that would ensure large multinational corporations pay their fair share and close loopholes that encourage corporations to shift jobs and profits overseas. It’s time for our nation to get closer, not farther away from Tax Justice!

Sister Simone Campbell will be at the Washington, DC Tax March on Saturday, April 15, 2017 to call on President Trump to release his tax returns. See more details about the DC march, or other local marches here: www.TaxMarch.org

Reflection on Day Two: We the People

We the People

By Susan Rose Francois, CSJP
July 13, 2016

“We the people.”

27660810933_fd1e939a4b_oThese words from the preamble to our U.S. Constitution, which by the way I learned to sing as a child from an animated Schoolhouse Rock cartoon on Saturday mornings, were in my head and heart upon waking this morning in a simple convent room at the motherhouse of the Springfield Dominicans.

“We the People of the United States, in order to form a more perfection union, establish Justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity…”

As I said, I learned to sing the preamble as a child and these words are indeed music to my ears. During my morning prayer I found myself wondering, just as I often do with the words of the Gospel, what if we actually lived them?

One of the privileges of being a Nun on the Bus is that we are going out to be with the people. Yesterday we met folks in Janesville, Wisconsin and Bloomington-Normal, Illinois who are struggling in this democracy of ours. They are struggling to make ends meet, to literally put a roof over their children’s heads.  They are struggling to access life-saving health care so that they can be healthy contributing members of our community. They are struggling to navigate our complex immigration system and fill out the right form at the right time so that they can have access to our democracy and share the responsibilities of citizenship.

Yesterday we also met people who are not necessarily struggling themselves, but whose hearts are moved to act for justice and with compassion to mend the gaps and reweave the fabric of our society.  They are advocates, immigration attorneys, volunteers in the local prison, social workers, friends, family members, neighbors and pastors.  They are every day good people. Goodness is a word that has already peppered our prayer and conversations on the bus.

We the people.  One thing that Sister Simone Campbell has been telling folks on the road is that if we the people created this mess, then we the people can get ourselves out of it.  People are struggling because of the policy choices we have made as a people, or that our elected representatives have made on our behalf.  What we need are policies which instead begin to mend the gaps and invest in the welfare of all the people.

Last night during our caucus in Bloomington-Normal, I was lucky enough to sit around a table with some of these good people and discuss ways to mend the wealth and income inequality gap through tax justice.  Now, I will be the first to admit that taxes are not usually the most exciting conversation topic, and yet last night I was moved and inspired by the passion with which these folks talked about the desperate lack of funding for needed services in their community.  As tax payers and neighbors, they shared a common concern for the way our social safety net has been frayed and the future long-term health of our communities ignored in favor of short term profit and gain.

“We must regain the conviction that we need one another, that we have a shared responsibility for others and the world, and that being good and decent are worth it.”

Those words are not from the Constitution, but rather from Pope Francis in Laudato Si.

The folks I met at the caucus were the embodiment of that simple statement. I suspect the folks I meet today on the road in Springfield, Illinois and Jefferson City, Missouri will be further signs of hope for ways we can reweave the fabric of our society.

We the people are in this together.

Blog: 10 Things Speaker Ryan Could Do to Address Poverty Right Now

10 Things Speaker Ryan Could Do to Address Poverty Right Now

NETWORK Lobby
June 7, 2016

NETWORK Lobby for Catholic Social Justice welcomes anyone, any time, to the conversation about how to make sure no one in the United States lives in poverty. But we strongly dispute the claim that this is a deeply complicated problem requiring a brand new agenda, such as the one likely to be presented by Speaker Paul Ryan in the coming days. The fact is Congress knows, and has always known, how to end poverty. It is simply not that difficult, in the richest country the world has ever known, to create an inclusive economy where everyone has the resources to live with dignity.

In fact, we could do much of it as early as tomorrow.

Toward that end, we offer Speaker Ryan, the driving force behind the Republican “anti-poverty” agenda, 10 things he could bring to the House Floor tomorrow that would actually work. This is not everything that has to be done to mend the gaps in the fabric of our society, but it’s a darn good start.

  1. Raise the minimum wage to $15 an hour — Even as the economic recovery has brought lower unemployment, too many people working full-time jobs (or even two or three of them) don’t make enough to get by. A study by the National Employment Law Project found that $15/hour was the lowest wage that would still allow a single worker to meet the basic cost of living just about everywhere in the United States. Speaker Ryan could help lift thousands of workers out of poverty by passing H.R. 3164, the Pay Workers a Living Wage Act introduced in Congress last year.
  2. Guarantee paid sick leave — 49% of workers in America still lack paid sick leave and are forced to choose between losing the salary they desperately need and jeopardizing their health and the health of those around them. After passing a comprehensive paid sick leave policy New York City found not only that it improved the health and financial security of workers, but also that unemployment dropped and businesses grew.The Healthy Families Act (H.R. 932) was introduced in Congress more than a year ago. There’s no excuse not to pass this legislation today.
  3. Guarantee paid family leave — In addition to ensuring that everyone has the ability to take a sick day to care for themselves or their family, we must also guarantee paid leave for new parents and those who have to take extended time to care for a sick family member. Only 5% of workers in the lowest 25% wage category have access to paid family leave, compared to 22% of workers in the highest 10% wage category. The FAMILY Act (H.R. 1439), introduced in Congress last year, builds on successful legislation passed by cities and states around the country to create an insurance program that provides workers with the family leave they need.
  4. Expand and protect the Earned Income Tax Credit — The Earned Income Tax Credit (EITC) is one of our most effective anti-poverty programs. It provides tax relief to low-income workers to ensure that no one who labors to earn a basic wage is taxed back into poverty. According to the Center on Budget and Policy Priorities, the EITC helped lift 6.2 million people out of poverty in 2013. But the current law overlooks too many workers in need, including those low income workers without children and workers under 25 or over 65. Speaker Ryan himself discussed his support for addressing these gaps when he was Chairman of the House Budget Committee, now he has the means and the opportunity to make those changes today.
  5. Expand childcare subsidies — The high cost of quality childcare takes a dramatic toll on low-income families across the country. A report from theEconomic Policy Institute found that in every state, quality childcare cost more than 30% of a minimum-wage worker’s earnings. Access to high quality childcare allows parents to support their families and better prepares children to learn and grow into healthy adults. We shouldn’t ask people to choose between their kids and their paychecks — H.R. 4524, the Child CARE Act, is one way that Speaker Ryan could solve that problem.
  6. Ban the box — It’s no secret that admitting to having a criminal record is the kiss of death for job applicants. Conviction records are likely to reduce the prospect of a job offer or interview by almost 50%. There are currently 70 million people in America with arrest or conviction records, we are only just beginning to realize the massive economic implications of discriminating against the people who are reentering society and the workforce. Passing the Fair Chance Act (H.R. 3470) would allow people seeking to reenter the workforce the opportunity to apply based on merit, without facing discrimination.
  7. Pass immigration reform with a path to citizenship — For the millions of people who live in the U.S. without documentation or with only temporary permission to work, finding stable employment can be nearly impossible. Many more immigrants are barred from accessing the social programs they need because of decades of anti-immigrant legislation. By allowing immigrants to come out of the shadows and fully participate in society, immigration reform would benefit individual families and our community; the CBO estimated that immigration reform would reduce our federal budget deficit by $200 billion over ten years. H.R. 13, the Border Security, Economic Opportunity, and Immigration Modernization Act, had the votes to become law in 2014 and is a viable solution to fixing our broken immigration system. Speaker Ryan should work with his fellow members of Congress to pass real immigration reform now.
  8. Expand eligibility and opportunity for low-income housing units — There is a significant shortage of affordable housing units across the country. Bipartisan legislation in the Senate rumored to be introduced in the House of Representatives (The Affordable Housing Credit Improvement Act) would incentivize the building and preservation of almost 1.3 million homes. Speaker Ryan can move forward with his commitment to end poverty by developing a housing plan that focuses on ensuring that everyone has a home.
  9. Continue to make healthcare more affordable — The Affordable Care Act was a critical step toward making sure that all Americans can access the healthcare they need, but it stopped short of realizing the goal of universal healthcare. H.R.3241, the State-Based Universal Health Care Act of 2015, would allow states more flexibility and freedom to work toward universal healthcare. Speaker Ryan can move forward today to ensure that no one lives in the healthcare gap and take a powerful step toward alleviating the economic uncertainty and financial burden of families still left without health insurance.
  10. Reauthorize and improve the Child Nutrition and WIC Reauthorization Act — The landmark legislation that helps feed children in schools across the country has been under attack by congressional Republicans. Congress has sought to cut the number of schools eligible to feed all of their students and increase the amount of time and effort schools must put into qualifying for the program. Beyond these initial changes that will kick thousands of students out of the program, Republicans in Congress want to replace the entire program with ‘block grants’ that will seriously jeopardize our ability to feed children in need. Congress has an opportunity to improve child nutrition programs to feed more children who are hungry. If Speaker Ryan wants to lead on poverty, he can start by leading his party away from policies that take food from children.

As NETWORK’s Nuns on the Bus reminded Congressman Ryan in 2012, to implement programs that work to eliminate poverty, Congress must have the political will to raise reasonable revenue for these responsible programs. We can pay for these programs by closing tax loopholes and having the courage to fix our broken tax system. Right now, a loophole in tax law allows hedge fund managers to call a portion of their earnings a ‘capital gain’ instead of ‘income’ and that small difference costs the nation billions in tax revenue every year. The Carried Interest Fairness Act (H.R. 2889) is one such piece of legislation that promotes tax fairness in the United States.

Creative solutions to solving poverty are necessary, but we don’t need to look far to find the answers. What if — instead of giving the billionaires another break — we took that money and used it to expand Section 8, the federal program that helps low-income families find affordable housing? NETWORK Lobby judges all legislation by how it would affect people experiencing poverty. If Speaker Ryan is serious about this issue, we encourage him to use the same criteria.

Photo courtesy of Gage Skidmore

Guest Blog: Lessons from Just Advocacy Week

Guest Blog: Lessons from Just Advocacy Week

Jalen Brooks-Knepfle
Feb 24, 2016

Jalen Brooks-Knepfle

My name is Jalen Brooks-Knepfle and I am a second-year student at the College of Charleston in South Carolina. I am majoring in English and international studies with a concentration in comparative literature and minoring in environmental studies. Last June, I took part in Just Advocacy Week, which taught me many important lessons.

First, in a world frequently torn apart by religious violence, the lessons I learned about social justice and advocacy rooted in Catholic faith reminded me that religion prompts many, many people to help others and care for those marginalized by society. These people include everyone from Sister Simone, to the other people working at NETWORK, to my fellow JAW students. This was very encouraging, and much needed at that point in my life.

In addition, Just Advocacy Week showed me how accessible government can be, despite my previous beliefs to the contrary. The most dramatic example of this was the opportunity to speak with my government representatives to promote the Earned Income and Child Tax Credits. Although I know I was not the one to do the legwork to arrange the meetings, I was still amazed at how easy it was to speak to the people who represent me. I had an image in my head of government as some unreachable entity up on Capitol Hill, but JAW proved to me that government is a lot more accessible than we often believe. Additionally, even though my representatives are of a different party than me, most of them were still very eager to hear what I had to say and made me feel like I had a right to talk to them (Which, in fact, I do; as we were taught at JAW, they work forus!).

Finally, my experience at JAW gave me access to a group of people who are making real change. One thing I learned is to go at every project with other people to support you, and JAW gave me access to such people.

I was lucky enough to be able to share what I learned at JAW with some of my peers in the College of Charleston’s Catholic Student Association. Our campus minister, Jim Grove, invited me to talk about my experience at JAW, as well as what I learned from NETWORK about advocacy in general, at one of our after-Mass Sunday dinners. I learned so much at JAW, so it was hard to condense it to one fifteen-minute talk. Basically, I explained how NETWORK was founded by a group of nuns, where Catholic social justice comes from, how Catholics have an obligation to seek social justice, and the basics of how to do that. To this end, I discussed some advocacy tactics like phone calls, letter writing, and visits to representatives, emphasizing what I learned about the accessibility of government. I also discussed how NETWORK was applying these tactics to the EITC and CTC. I had been nervous about my talk’s reception, but my fellow Catholic students reacted with enthusiasm, some of them expressing interest in applying to JAW this coming summer. Jim and I have also since made plans to collaborate with other religious groups in the area to discuss ways we can use advocacy to help alleviate the refugee crisis.

I learned so much through Just Advocacy Week and look forward to applying that learning in the future!

 

Apply for Just Advocacy Week 2016 here.

Blog: Important New Tax Information

Important New Tax Information

By Laura Peralta-Schulte
August 28, 2015

NETWORK continues to advocate for making permanent the 2009 Earned Income Tax Credit (EITC) and Child Tax Credit improvements set to expire in 2017 as well as to strengthen the EITC to include younger, childless workers. These essential anti-poverty credits have been hugely effective at helping families achieve financial stability. If the key provisions expire, 16 million Americans, including 8 million children, will fall into — or deeper into — poverty.

So far, NETWORK has generated over 6,500 signatures of religious leaders and concerned citizens from around the country asking Congress to prioritize these anti-poverty tax credits. Members of our grassroots community in key districts have also met with key Members of Congress in their districts this August recess asking that the credits be made permanent.

From a process standpoint, there will be at least one, but possibly two, tax bills this fall that could provide an opportunity for action. The first is the Highway Bill, an important jobs bill that funds U.S. roads, bridges and public transportation. Republican leaders in the House and Senate have suggested that the highway bill be expanded to include making permanent select business credits, such as the research and development tax credit. Advocates for the EITC and the Child Tax Credit are urging lawmakers to also make permanent the working family tax credits, particularly if they are providing expensive tax breaks to wealthy corporations.

A second tax bill that could move forward is a short-term extension of a number of mainly business tax credits that are typically extended a year or two at a time. If we are unsuccessful in getting the EITC and CTC made permanent in the Highway Bill, we will seek an extension of the credits in this bill.

Decisions about whether to include the EITC and Child Tax Credit proposals are being made now. It is imperative for advocates to talk to their Member of Congress and explain why it is critical that they take action this fall in support of these key anti-poverty measures.

Guest Blog: Reflection on NETWORK’s “Just Advocacy Week”

Reflection on NETWORK’s “Just Advocacy Week”

By Billy Critchley-Menor
July 13, 2015

Originally appeared on the Strength from the Cloud blog

 “We’re not about that polarization crap.”

To many millennials, the Catholic Church has become an outdated and irrelevant institution. Many in our parents’ generation have forgotten, watered down, or walked away from the Church. But what perhaps is even more tragic than the number of people leaving the church, is the divide we find inside it. Growing up in today’s Catholic landscape, millennials are exposed to a heartbreaking and toxic polarization between “liberal” and “conservative” Catholics and are often, it seems, pressured to choose a side, or get out. I am strengthened however, by the millennials I have met who refuse to choose a side and refuse to get out.

Recently, I flew from my home in Duluth, Minnesota, to Washington, D.C. to attend Just Advocacy Week, a week-long training on Catholic social justice and advocacy for college students. The event was put on by NETWORK, the Catholic Social Justice Lobby.  As a long-time fan, spending a week with the organization was almost a dream come true. Although, knowing that NETWORK and the institutional church have both publicly criticized each other on different occasions, I was skeptical of the crowd I would encounter. I expected to spend the week with people who were quick to correct “Catholic” to “liberal Catholic,” people who cared about social justice but demonized the Church and saw the sacraments as secondary. My expectations however, were shattered by the other young people I met.

I anticipated a week that would perpetuate polarization, but instead found beaming hope in millennials who said, “We’re not about that polarization crap.” I encountered a group of college students eager to salt the earth, to defy the stereotypes of their generation, and to serve their Church with the gospel as their guide and the sacraments as strength.

Our current culture tells us that we can’t have a conversation about abortion with differing opinions and still break bread together. It tells us that income inequality and canon law are conversations to be had with separate people, in separate occasions, and only with those who share your opinions on both of them. If we truly live out our Catholic faith however, we will be a paradox in the eyes of the world.

This radiant Catholic paradox is what gives me hope. Over the week the sixteen of us college students engaged in conversations about the Earned Income Tax Credit and women’s ordination. We shared the stories of our different confirmation saints and discussed the tragedy of such low tax rates on capital gains that allow the rich to get richer and the poor to get poorer. We spent time with Sr. Simone Campbell and learned from her witness to justice on Capitol Hill. We spent some time at the Poor Clares’ in Adoration of the Blessed Sacrament. We spoke with the same passion as we railed against for-profit prisons and lamented the death of innocent children and wrongly convicted men and women. We eagerly awaited, with the rest of the world, the release of Laudato Si and over breakfast and Metro rides, shared incredible wisdom as we read from and tweeted the papal encyclical with our smartphones.  We shed tears over our racist, sexist, and classist culture, but lifted each other up in joy, laughter, and especially in shared prayer. We refused to let our faith be put under a bushel basket.

Putting our faith into action, we closed the week on Capitol Hill lobbying our senators and representatives to make permanent the Earned Income Tax Credit and the Child Tax Credit. We were not lobbying as Democrats, or Republicans, we were lobbying as Catholics who understood their moral obligation to engage in the political sphere and work to end oppression of those who live on the margins in America.

On our last evening together, our group listened to a recording of Dr. King’s I Have a Dream speech and were reminded that so many of King’s lamentations in 1963 have been left unresolved. Though, as we shared our own dreams we were empowered with King, and the prophet Isaiah to “dream that one day every valley shall be exalted, and every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight; and the glory of the Lord shall be revealed and all flesh shall see it together.” It became clear that our passion for justice was rooted in our immense love for God and God’s Church.

This generation of faith is falling in love with the right things. We are falling in love with the Catholic Church and its challenging and radically beautiful paradoxes in a new way. We are falling in love with Catholicism that preaches unity rather than one that requires labels. We are falling in love, and my prayer, like Father Arrupe’s, is that we stay in love and let it decide everything.

Blog: Inequality and the Estate Tax

Inequality and the Estate Tax

By Carolyn Burstein
April 17, 2015

On April 16, the House voted (H.R. 1105) to repeal the estate tax. The vote (240-179) broke down largely on partisan lines. NETWORK actively opposed the bill.

Background

An estate may consist of property, stocks or any combination of assets that a person owns. The Center for Effective Government (CEG), in an April 15 article, calls this move “alarming.”

After clarifying that the estate tax affects a miniscule proportion of Americans – only .2%, according to the research of the Center on Budget and Policy Priorities (CBPP) — the CEG makes very clear that repeal would exacerbate wealth inequality in this country. That is because it would result in approximately $269 billion (a figure derived from the Joint Committee on Taxation – JCT) in less funding over the next decade for programs in education, healthcare, child nutrition, etc. These are programs that help average — low-income and middle-income — people. This situation is especially stark in the context of the House budget, which already proposes to cut health reform, Medicaid, the Supplemental Nutrition Assistance Program (SNAP) and Pell Grants.

Only about two out of every 1,000 people who inherit an estate owe any taxes because the amount of the estate’s worth has increased from $650,000 in 2001 to $5.43 million per person ($10.86 million for a couple) in 2015 before the tax is triggered. As the CEG article notes, for “99.8% of Americans, death is a time when taxes are forgiven, not owed.”

The Tax Policy Center (TPC) estimates that only about 20 small business and farm estates owed any estate tax in 2013, and those owners paid only an average of 4.9% of their value in taxes (TCP Table T13-0020, quoted in a CBPP report entitled “Eliminating Estate tax on Inherited Wealth Would Increase Deficits and Inequality” issued on April 13, 2015).

Examples

Following up on this issue of the number of taxable estates, let’s compare a few random years. In 1977, 139,000 estates had to pay the estate tax (the estate tax has been assessed since 1916); in the year 2000, about 52,000 estates filed for the estate tax; whereas in 2013 only 4,687 filed. An incredible diminution over time!

If owners’ wills set up trust funds for heirs, and, given the fact that capital gains that normally accrue on the appreciation of assets are only realized when the asset is sold, then the normal capital gains tax would not apply if the estate tax is repealed. According to CBPP, “Unrealized capital gains account for a significant proportion of the assets held by estates, ranging from 32% for estates worth between $5 million and $10 million to about 55% for estates worth more than $100 million.”

An even more consequential reason that repeal of the estate tax is unsettling is that it would bestow a tax windfall averaging more than $3 million apiece on those who are often already extremely wealthy, according to CBPP calculations.  That calculation is based on the fact that roughly 5,400 estates nationwide would face the estate tax in 2016. However, one must keep in mind that the 1,336 estates worth $20 million or more would receive a tax windfall averaging $10 million and the 318 estates worth $50 million or more would receive tax benefits averaging more than $20 million each. Since large inheritances play a substantial role in wealth concentration, especially at the top of the wealth pyramid, they are a prominent deterrent to economic mobility and belong in the category of “unearned income.”

While estate taxes constitute a tiny part of the federal budget — $269 billion between 2016 and 2025 – nevertheless, an April 15 online article  by “Think Progress” notes that this amount would be sufficient to fund the Food and Drug Administration, the Centers for Disease Control and the Environmental Protection Agency combined. Or more to the point, as the April 15 online edition of the Huffington Post  elaborates, $75 billion would let every low-to-moderate-income four-year-old attend preschool; or $209 billion would be enough to send 9 million striving Americans to a community college; or $89 billion would keep college affordable for millions more by reversing proposed budget cuts to Pell Grants; or ensure there’s enough food on the table for children, seniors, veterans and their families by restoring $125 billion in cuts to food stamps made in the House and Senate budgets.

Polls have long suggested that most people believe the wealthiest Americans don’t pay their fair share of taxes. Senator Debbie Stabenow (D-MI) said with a laugh on April 14, “I guess when it comes to helping the wealthiest people in the country, it’s never enough.”

House Ways and Means Committee Chairman Paul Ryan (R-WI) claimed that the estate tax is “absolutely devastating” for family farms, and he said that the repeal would remove “an additional layer of taxation” from assets that had already been taxed. An online Washington Post article on April 14 rebuts Ryan by indicating that only 120 small businesses and farms nationwide were subject to the estate tax in 2013. And because of all kinds of discounts and other breaks, such as low valuation rules and delayed tax payments, few heirs were hurt in any meaningful way. Furthermore, Congress has repeatedly cut the tax rate and increased exemptions. And there is no “double taxation.” Even the Americans for Tax Fairness conceded that 55% of the value of estates worth more than $100 million had never been taxed.

The Department of Agriculture estimates that with the exemptions, only .6% of American farms would have to pay an estate tax – more might file, but would owe no taxes. Even Senator John Thune (R-SD) and his staff could not identify any farms that were forced to be sold because of the estate tax. They indicated that in a few cases some new owners had to sell some acreage to pay the tax, but even in those cases this occurred because land prices had soared in certain areas.

We Must Not Increase Inequality

At a time when income inequality is one of our most vexing problems, the wealthiest .2% of Americans who have already become the permanent elite of this country, needs no help from Congress to ensure their status. One can partially rest in the knowledge that the estate tax proposal is unlikely to make it through the Senate or past a presidential veto. President Obama and many other senior Democrats want to expand the estate tax especially by targeting more estates with a higher top rate. On April 15, the online edition of The Hill pointed out that White House officials have reemphasized the president’s proposals to give tax breaks for child care and education and to two-earner families. They are right to conclude that such policies, if passed, would help far more people than the GOP’s estate tax repeal.

Indeed, this latter point is significant. The effort to repeal the estate tax does nothing to promote family stability, respond to the needs of people at the margins, or address the human needs of people. At a time when the gap between the wealthy and those barely able to afford the necessities of life is yawning widely, no one should support the repeal of the estate tax.

NETWORK believes that the accumulation of wealth (or profits) should never take precedence over ensuring adequate resources for all people to lead a dignified life, and that includes meeting the basic needs of the whole person. Giving a very few people who are heirs to a huge estate a tax windfall does not build a relational society based on achieving the common good for all. We are called to act beyond selfishness, to approve an outreach to community that supports the eradication of all injustice no matter what form that takes. And what some call the “repealing the death tax” falls into the category of classism—a major injustice today.

Blog: Extend and Expand the Earned Income Tax Credit (EITC) and the Child Tax Credit

Blog: Extend and Expand the Earned Income Tax Credit (EITC) and the Child Tax Credit

Carolyn Burstein
Mar 09, 2015

Catholic Social Teaching is clear that all people have the right to live in human dignity, which for many is not possible without tax incentives since payroll taxes are taking a larger and larger bite out of their meager wages.

Next to Social Security, the EITC and the Child Tax Credit lift more people out of poverty than any other federal program. However, both programs will expire in 2017 if they are not extended. We believe that expanding the EITC and the Child Tax Credit for low-income workers themselves as well as for their families is a matter of basic tax fairness.

Economists across the political spectrum agree that the EITC has been one of the most effective anti-poverty programs we have. Together with the refundable Child Tax Credit, it helps keep about 10 million Americans, including more than 5 million children, out of poverty. There is also a consensus that making these programs permanent as well as expanding the EITC would strengthen opportunity for workers who are struggling to get by and help families become more economically secure. These tax credits have the power to raise living standards and lift millions of working Americans out of poverty.

Working Families Tax Relief Act

While we wait for a Republican proposal, we want to call attention to the “Working Families Tax Relief Act,” which has been introduced by Democrats. Senator Sherrod Brown (D-OH), the ranking Democrat on the Banking Committee, cosponsored this proposal with Senator Dick Durbin (D-IL). The measure would expand the EITC and Child Tax Credit to make permanent the expansion of credits that took effect in 2009, would expand the EITC for “childless workers” (more on this below), would extend both programs indefinitely, would index the Child Tax Credit to inflation and make it easier for qualified Americans to claim the EITC.

Senator Brown said, “The Earned Income Tax Credit and the Child Tax Credit lift families out of poverty, provide an incentive to work, and put real money back in the pockets of working Americans. That’s why expanding and strengthening these tax credits is so important. To reform our tax code, we must start in the homes of working Americans — not in corporate boardrooms.”

Reps. Richard Neal (D-MA) and Rosa DeLauro (D-CT) are co-sponsoring the House version of the bill.

Other Proposals

The other proposals led by the Senate leadership include “The 21st Century Worker Tax Cut Act,” which introduces a new tax credit worth up to $1000 for families in which both parents work; “Helping Working Families Afford Child Care Act,” which would increase the size of the typical credit for child and dependent care from the current $600 to $2800 (but could rise as high as $8000) for most middle-income families; the “American Opportunity Tax Credit,” which gives families up to $3000 credit for college tuition and includes families earning up to $200,000.

What would happen in 2018 if the EITC and Child Tax Credit provisions expire in 2017? It would have a dire effect on the economy as a whole and on working families in particular. A study released last month by the Center on Budget and Policy Priorities (CBPP) found that more than 16 million people in low-income working families, including 8 million children, would fall into — or deeper into — poverty; and some 50 million Americans, including 25 million children, would face substantial cuts.

History and Effectiveness of the EITC and Child Tax Credit

The Economic Policy Institute (EPI) produced a major study of both the EITC and Child Tax Credit in September 2013, from which much of the following information is gleaned. Because of the nature of the study, the findings are still timely.

The EITC was first signed into law in the 1970s by President Ford and was considered an anti-poverty program and an alternative to welfare because it incentivized work. The program was expanded by President George W. Bush in 2008 and by President Obama in 2009 as part of the American Recovery and Reinvestment Act (ARRA). Under ARRA, benefits for families with more than two children were boosted and marriage penalties were reduced (some EITC for certain couples were no longer lost when they married).

Originally in the 1970s, the EITC was intended to offset the Social Security payroll taxes for low-income workers as well as rising food and energy prices, but no longer covers those costs.

Let’s be sure we understand how the EITC works. The EITC is work-oriented in that the amount of the tax credit is based on earnings from wages and salaries or self-employment income. The amount of the credit increases as earnings increase, but reaches a plateau, and then falls as earnings increase. For example, for a couple with two children, the credit rate is 40% of the first $13,090 in earnings, with a maximum credit of $5,236 if earnings reach $22,300. Over that amount the credit rate drops substantially until it reaches zero for taxpayers over $47,162.

Low-income workers with no children and noncustodial parents are also eligible for the EITC, but the maximum credit is just a small fraction of that for families with children and often too complicated for potential recipients to bother with.

The Child Tax Credit was enacted as part of the “Taxpayer Relief Act of 1997.” The origin of the credit can be traced to a recommendation for a $1000-per-child tax credit by the 1990 National Commission on Children, but was substantially less generous in the original law. It was eventually increased to $1000 per child as part of the 2001 and 2003 Bush tax cuts. The ARRA expansion of the Child Tax Credit substantially lowered the threshold for earnings to qualify for the tax credit.

The Child Tax Credit allows a nonrefundable credit against income taxes of $1000 per qualifying child under age 17. Unlike the EITC, the Child Tax Credit is not targeted to just lower-income taxpayers. A couple with two qualifying children can receive the tax credit with adjusted gross income levels of $150,000 (those levels are in the top 10% of the income distribution).

The EPI summarizes the major findings on the effectiveness of the EITC and Child Tax Credit as follows:

  • Both the EITC and Child Tax Credit were initially proposed, supported and expanded by Republican lawmakers with broad bipartisan support
  • Both the EITC and Child Tax Credit fail one of the criteria of evaluating tax provisions: simplicity and convenience. Claiming the tax credits can be complicated and involves filing many forms, which leads to errors of both over-and under- payment
  • The EITC appears to increase the labor force participation of single mothers, yet the high marginal tax rates associated with its phase-out range do not appear to have a significant work disincentive effect
  • The EITC is the most progressive tax expenditure in the income tax code
  • The EITC reduces poverty significantly, with children constituting half of the individuals it lifts out of poverty
  • The EITC and Child Tax Credit are effective in increasing after-tax income of its recipients and reducing income inequality.

A recent paper (February 20, 2015) by the Center on Budget and Policy Priorities focuses attention on low-income “childless workers” — adults without children and non-custodial parents — who receive little or nothing from the EITC. At the present time, this is the only group whose income and payroll taxes together either push them into poverty or deeper into poverty. CBPP estimates that there are over 7 million people in this category.

The Brown-Durbin bill would substantially strengthen the EITC for this group by lowering the eligibility age to 21, raising the maximum amount of credit offered and increasing the phase in/out rates.

Based on studies done by several economists and psychologists, the CBPP paper maintains that strengthening the EITC for “childless workers” would have a number of social as well as economic benefits, including the following:

  • would increase labor force participation among low-skilled childless workers
  • may increase their earnings, and thus their marriage rates and stability
  • could help reduce crime and incarceration rates among the young
  • would help their children (many are noncustodial parents) financially and would assist them in serving as role models for their children

A Matter of Fairness

Just as those in Congress who believe firmly that the EITC and the Child Tax Credit should be extended beyond 2017 and expanded in scope are beginning this journey now, we, at NETWORK strongly encourage all advocates to begin planning effective ways to support this effort. As is clear from examining a history of these two programs, extension has always garnered bipartisan support. And there is little controversy about the effectiveness of either the EITC or the Child Tax Credit.