Congress Seeks to Provide Tax Relief for the Middle Class by Increasing the Tax Burden on Immigrants

December 13 2011

Julian Teixeira
(202) 776-1812

Congressional Leaders Seek to Provide Tax Relief for the Middle Class by Increasing the Tax Burden on Hardworking Immigrants Raising Children

Washington, D.C.—As Congress scrambles to pass a tax package before the end of the year, Republican lawmakers in the House of Representatives have proposed prohibiting eligible immigrant taxpayers from receiving a refundable Child Tax Credit in order to pay for their tax relief plan. NCLR (National Council of La Raza) supports middle-class tax relief but is outraged that congressional leaders would pay for it by taking $9 billion out of the pockets of hardworking and mostly poor immigrants who are raising families. The House proposal would affect two million families, driving them deeper into poverty.

“We support congressional efforts to pass tax relief and believe that there are many ways to pay for it that do not result in harming some of the most economically vulnerable families across the nation,” said Eric Rodriguez, Vice President of the Office of Research, Advocacy, and Legislation at NCLR. “The Child Tax Credit is probably one of the most effective ways to provide relief to workers raising children, and the refundable credit is even more critical to workers earning low wages. It’s outrageous that of all the options that lawmakers have on the table to pay for tax relief, this is the one that they would choose.”

The Republican tax plan aims to change the Child Tax Credit law by preventing immigrants who use an Individual Taxpayer Identification Number (ITIN) from collecting the refundable Child Tax Credit. ITINs are commonly used by immigrants who lack a Social Security Number to pay the income, Social Security, and Medicare taxes that they owe. In 2010, ITIN tax filers paid more than $9 billion in payroll taxes to support Social Security and Medicare.

More than 70 percent of families who use the refundable Child Tax Credit earn less than $30,000 per year, and 63 percent earn less than $25,000 per year. Thus, the financial harm from this provision will fall on families who earn less than $12 to $15 dollars per hour and who are raising children.

The Census Bureau recently published the Supplemental Poverty Line showing that millions more live in poverty in the U.S. than was previously known. Poverty among Hispanics was distinctly higher in part because many in the community are unlikely to use important anti-poverty programs like nutrition assistance. One of the most effective anti-poverty programs that is open to hardworking immigrant families raising citizen children is the Child Tax Credit. Closing off this source of assistance for low-income, working families will drive poverty levels in this country even higher.

NCLR urges Congress to pass a tax relief plan that is fair and does no harm to hardworking immigrants and their families.


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