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The Earned Income Tax Credit and Child Tax Credit are two of the most effective anti-poverty tools for working families with children. In 2009, as part of the stimulus bill, the two credits were modified to increase their impact for lower income families, married families, and families with three or more children. These improvements are slated to expire at the end of 2017, and if the do, an estimated 1 million children would fall into poverty and 7 million poor children would fall deeper into poverty. Approximately 50 million Americans with modest incomes — including 31 million children — would lose part or all of their Earned Income Tax Credit or Child Tax Credit. Families raising children on minimum-wage earnings would be particularly hard hit. A single mother raising two children on full-time, minimum-wage earnings of $14,500 would lose her entire child tax credit of $1,725 – worth more than 10 percent of her earnings.
CDF urges lawmakers to permanently extend the Child Tax Credit and Earned Income Tax Credit improvements so that children in low-income working families can continue to benefit from the extra boost these improvements provide.
A parent with two children working full-time at the federal minimum wage of $7.25 an hour currently earns $4,700 below the poverty level. Nearly 70 percent of the 14.7 million poor children in America live with an adult who works, and 30 percent live with an adult who works full-time year-round. It is way past time we increase the minimum wage. The current federal minimum wage is worth 32 percent less in inflation-adjusted terms than it was at its peak in 1968. If it had grown at the same rate as productivity, the minimum wage would be $18.30 today.
CDF urges lawmakers to raise the minimum wage to at least $10.10 an hour so no one working full-time earns below poverty wages.