Want to Make the Economy Better for Women? Pass Tax Relief.

A mom holds her child while sitting on a couch
Today, Senators Sherrod Brown (D-OH), Michael Bennet (D-CO), Dick Durbin (D-IL), and Ron Wyden (D-OR) introduced the Working Families Tax Relief Act – a critical piece of legislation that would begin to fix our tax laws to help working women and their families keep their heads above water. Alongside over 82 advocacy groups for children, families, workers, and women, the National Women’s Law Center proudly endorses this bill.

Why do women and working families need tax relief?

Many of America’s working families are struggling to stay afloat as costs have risen faster than their pay over several decades. With an economy that all too often leaves them behind, women, children, and families have been relegated to the sidelines in favor of tax cuts for the rich. In fact, too many women with low incomes struggle to provide for their families’ basic needs – often forced to choose between keeping food on the table and making rent or paying for child care. It’s time to ensure that our economy, starting with our tax system, works for all families, especially those who need it most.
As we know, the 2017 tax law was heavily tilted in favor of large corporations and the wealthy. The Working Families Tax Relief Act would help reconfigure the tax code to focus on women, children and families.  If this legislation had been in effect in 2017, over 25 million working women would have benefitted – including almost 4.9 million Black women, nearly 4.8 million Latinx women, 1.3 million AAPI women, and 280,000 Native American women. (Unpublished analysis of March 2018 Current Population Survey data by the Center on Budget and Policy Priorities.)

What’s in the Bill?

The Working Families Tax Relief Act would make a real difference for women, children, and families. It would strengthen the Earned Income Tax Credit (EITC) for working families with children and for working people without children at home, ensure that millions of children aren’t left out of the Child Tax Credit (CTC), and boost the CTC for families with very young children. In addition, this bill would boost Puerto Rico’s EITC and extending the bill’s CTC to Puerto Rico.
The Working Families Tax Relief Act is a critical first step towards making the tax code work for women, children, and families. Specifically, it would:

  • Provide a substantial increase in the EITC for working families;
  • Strengthen the EITC for working people not raising children, including making the EITC available for younger and older working people who are currently excluded from the tax credit;
  • Ensure that millions of poor children aren’t left out of the CTC; and
  • Target additional income support to low-income families with very young children.

Breaking it down by number of families helped, the bill would help make more than 46 million households more financially secure, benefiting more than 114 million people. It would benefit low- and middle-income Americans of all races, including 24 million white families, 8 million Black families, 9 million Latinx families, and 2 million Asian American families. This bill would lift 29 million people above or closer to the poverty line, including 11 million children.

This is a good deal for women and children

Women are overrepresented in the low-wage workforce, in jobs that are characterized by insufficient pay and few benefits. Black and Latinx women are particularly overrepresented in this workforce, with their share of low-wage jobs about twice the size of their share of the workforce overall. And younger women, who are just starting out in their careers, are likely to feel even more squeezed by the higher costs of raising young children when faced with stagnant wages. By expanding and strengthening refundable tax credits like the EITC and CTC, the Working Families Tax Relief Act would not only improve women’s economic security but also children’s economic prospects in the long run because higher family income from refundable tax credits is associated with higher skills and more years of education.
The Working Families Tax Relief Act is a critical first step towards making the tax code work for women, children and families.