In Texas, we have a rather unique blend of relatively low unemployment with high poverty. In other words, we have plenty of folks who are working — and working hard — but not making ends meet. Fortunately, we have useful, yet often overlooked, tools that enable Texas to fight poverty and expand opportunity: refundable tax credits for low-income workers. With tax filing season upon us, we should consider how Texas can maximize and build upon these platforms for prosperity.
The Earned Income Tax Credit, the Child Tax Credit, and other refundable tax credits for working families have become key tools in giving families a fighting chance for a better future. When taking these tax credits into account, more than 10 million Americans, including more than 5 million children, were effectively lifted above the poverty line in 2012. The earned income credit also has long-term benefits by improving children’s academic performance and future earnings as adults.