Over 3 million low-income children in rural areas face cut in child tax credit if recovery act improvement expires

According to this new research, at the end of 2010, the Child Tax Credit improvements that were included in the 2009 American Recovery and Reinvestment Act will expire if Congress does not extend them. If this happens, low-income working families across America will be affected

Various Supports for Low-Income Families Reduce Poverty and Have Long-Term Positive Effects On Families and Children

Since the Great Depression, the United States has developed a set of supports to help low-income families, seniors, children, and people with disabilities make ends meet and obtain health care. Extensive research indicates that these supports lift millions of Americans out of poverty, help "make work pay" by supplementing low wages, and enable millions of Americans to receive health care who otherwise could not afford it. To be sure, the United States still has a higher poverty rate than many other advanced countries, and many Americans reach adulthood without the tools they need to succeed in the workforce. Various programs and policies, especially in areas such as job training and education, could be reformed and strengthened. But the claim that advocates of shrinking government sometimes make that public efforts to reduce poverty and hardship have failed is belied by the evidence

The Effect of the Earned Income Tax Credit in the District of Columbia on Poverty and Income Dynamics

Using unique longitudinal administrative tax panel data for the District of Columbia (DC), we assess the combined effect of the DC supplemental earned income tax credit (EITC) and the federal EITC on poverty and income dynamics within Washington, DC, from 2001 to 2011. The EITC in DC merits investigation, as the DC supplement to the federal credit is the largest in the nation. The supplemental DC EITC was enacted in 2000, and has been expanded from 10 percent of the federal credit in 2001 to 40 percent as of 2009. To implement the study, we estimate least squares models with 0/1 dependent variables to estimate the likelihood of net-EITC income above poverty and near-poverty thresholds. We also estimate the likelihood of earnings growth and income stabilization from the EITC. To identify the effect of the EITC, we exploit variation in the EITC subsidy rate from 2008 to 2009, when an additional EITC bracket of 45 percent was added for workers with three or more dependent children, up from 40 percent in the previous year for workers with two or more children. We also estimate a model examining the impact of city-level changes to the EITC. The structure and richness of our data enable us to control for tax filer fixed effects, an important innovation from many previous EITC studies. Overall, we find that the combined EITC raises the likelihood of net-EITC income above poverty and near poverty by as much as 9 percent, with the largest consistent effects accruing to single-parent families