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RELEASE: GRACE & End Child Poverty CA Statement on Proposed Federal Tax Deal

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ECPCA & GRACE urge Congress to improve the poverty-fighting potential of this package and to adopt proposal, benefitting more than 2 million children in California left out of the CTC under current law

[PASADENA, CALIF., UNITED STATES, January 16, 2024] — Statement attributable to Shimica Gaskins, President & CEO, GRACE & End Child Poverty California (ECPCA):

Today, chairs of the Senate Finance Committee and House Ways and Means Committee announced a deal that would be transformative to roughly 77% of the children nationwide whose families have been unable to claim the federal Child Tax Credit (CTC) since the pandemic-era expansion expired in 2021. Biden expanded the CTC under the American Rescue Plan Act, giving cash to families who needed it most and directly benefiting over 8 million children in California alone. This version of the CTC – one that offered larger credit amounts, was inclusive of children regardless of immigration status, fully refundable, and without an earnings requirement – remains our North Star. We remind stakeholders of the historic rise in poverty after its expiration and that ending poverty is a policy choice. 

The Tax Relief for American Families and Workers Act of 2024 has meaningful restorations that make the refundable portion of the credit larger for families, especially those with multiple children. Initial estimates are that once the deal takes full effect, over half a million children would be lifted out of poverty, likely including tens of thousands of California children.  

Given the proven record of the enhanced CTC, this deal falls short of what our families need and deserve – including children with Individual Taxpayer Identification Numbers (ITINs), full refundability, especially for low-income families, removing the arbitrary $2,500 earnings requirement, and increasing the overall size of the credit. Under current law, 98% of children in families in the lowest 20% tax bracket do not receive the full CTC, and the Wyden-Smith proposal only brings that figure down to 93%. 

Ultimately, this means that more unrestricted cash will largely not flow to the lowest-income families. Our families deserve more, and we know Congress is up to the task – we proved as much in 2021. These important, yet modest, improvements in the CTC are also paired with tax breaks to corporations which are projected to balloon in cost over time and threaten the parity of this package.

We therefore urge members of Congress to improve the poverty-fighting potential of this package and quickly take action to pass this proposal, benefitting more than 2 million children in California left out of the CTC under current law. This deal is an important step towards ending poverty nationwide, and we thank the California members fighting to maximize the poverty-fighting focus of these provisions.

Congress should prioritize investments in our nation’s children on their own, and should not need to be tied to other provisions that do not advance a more redistributive system of revenues and investments. Nevertheless we urge Congress to swiftly enact these provisions in order to ensure children and families benefit in time to file their taxes, then to continue making strides that bring us back to the expanded CTC under ARPA, providing what families truly need and advance an end to child poverty.

Infographic Source:
Hughes, Joe. (2024). Children Not Receiving Full Child Tax Credit Under Current Law vs. Proposal [Infographic]. Institute on Taxation and Economic Policy. https://itep.org/congress-tax-deal-child-tax-credit-corporate-tax-breaks/

End Child Poverty in California (ECPCA) is a campaign jointly sponsored by GRACE End Child Poverty Institute and GRACE (Gather, Respect, Advocate, Change, Engage).

GRACE End Child Poverty Institute is a 501(c)(4) nonprofit organization that uses advocacy, legislative advocacy and mobilization programs to achieve its mission.  The mission of GRACE End Child Poverty is to make a positive difference in the lives of low-income families and their children through value-based collaborations and by formulating, implementing, and expanding measures to reduce barriers to full personal development and economic stability.

End Child Poverty CA Coalition 2019-2020 Budget Wins

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The final California state budget allocates almost $5 billion toward investments called for in the State Lifting Children and Families Out of Poverty Task Force’s End Child Poverty Plan.

State legislation created the Lifting Children and Families Out of Poverty Task Force to develop an anti-poverty plan that was released just before the new governor and legislature took their oaths of office in January. The End Child Poverty in California Coalition of 50+ partners rallied people, organizations and elected officials to adopt the Task Force’s End Child Poverty Plan, which would end deep child poverty in just four years when fully implemented. The End Child Poverty Plan would also reduce overall child poverty by 50 percent over the next decade.

As a result, the final state budget includes unprecedented investments to address deep child poverty. Furthermore, several pieces of legislation and budget proposals have been introduced to implement the comprehensive End Child Poverty Plan.

“This budget represents an unprecedented strategic investment to address poverty and inequality in California. Make no mistake, however — this is a down payment. Fully funding the Task Force’s plan would end deep child poverty in California in four years, and our campaign will keep working with our elected officials and all Californians to do just that. Thank you to the Governor and the Legislature with leaders on both sides of the aisle and across the political spectrum for their unprecedented action to help kids and families,” said Conway Collis, co-chair of the Lifting Children and Families Out of Poverty Task Force, and CEO of GRACE and End Child Poverty in California.

450,000 California children live in deep child poverty. If concentrated as a population, those children would comprise the state’s eighth largest city — larger than Oakland, twice as large as San Bernardino, and just smaller than Long Beach. When fully realized, savings generated by lifting these children from poverty would total $12 billion annually, on an ongoing basis, representing a dramatic return on investment.

“We could not have done this without the broad-based coalition of anti-poverty advocates, faith-based organizations, non-profits, education advocates, business and labor who worked tirelessly to build support for this important victory. This budget is a reflection of the beginning of a sea change, with ending child poverty in California, as the Governor has stated, his North Star.  We have more to do, but this is a significant step in the right direction and we are looking forward to continuing our work with this coalition, the legislature and the Governor,” said Jackie Thu-Huong Wong, Vice President for Policy and Advocacy at GRACE and End Child Poverty in California.

California has the highest number of children and highest percentage of children living in poverty of any state in the nation — almost 2 million children, who represent one out of every five California kids. Deep poverty is defined as families living at or below 50 percent of the federal poverty line, or less than about $12,500 for a family of four. In addition, 204,000 California children experience homelessness.

Infographic: Key End Child Poverty CA Coalition Budget Wins

Additional CA Budget Information & Reactions

  • State budget analysis from our coalition partner Western Center on Law & Poverty: click here.
  • Budget statement from CalEITC4Me on the California Earned Income Tax Credit expansion: click here.
  • Statement on child care wins from our coalition partners Parent Voices & Child Care Law Center: click here.
  • Article in Vox on the CalEITC expansion in California and its national relevance: click here.
  • Additional information on the End Child Poverty Plan: click here.
    LA Times story on the release of the End Child Poverty Plan: click here.

State Budget Wins for California Kids

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Governor Jerry Brown just signed the 2017–2018 budget that includes some key wins for California’s children living in poverty:

    • More than one million more households will now be eligible for the California Earned Income Tax Credit (CalEITC), a program that puts money back in the pockets of poor working families. The expansion raises the eligibility threshold to $22,300 for families (that’s a year’s salary working for minimum wage). Read more.
    • Funding for preschool and child care programs will be boosted by $25 million, creating 2,900 more slots. These programs are an excellent investment that provide dividends to families and communities well into the future, and California is leading the way. Read more.
    • Nearly $240 million is included to continue much-needed preschool and childcare provider rate increases. According to the National Association for the Education of Young Children (NAEYC), early childhood educators earn 40% less than other professionals with similar qualifications. Read more.
    • $50 million is allocated to the After School and Education and Safety program (ASES), that provides critical after school programs for children. After-school and summer programs are critical resources for children and working families. Read more.

Thanks to YOU we’ve been able to support these efforts. Together, we can reduce child poverty in our state by 50%.

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Photo credit Adobe Stock © Rob 2017

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