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Policy Issues

Taxes and Tax Time

The federal government spends more than $540 billion per year helping Americans save and build assets, mostly on tax breaks for homeownership and education savings. Unfortunately, most of these tax incentives go to high-income earners, while low- and middle-income workers get little to nothing. .

A Fairer Tax Code

Turn It Right-Side Up | Campaign Website
Instead of spending billions to exacerbate wealth inequality, why not help all Americans build wealth? Visit the Turn It Right-Side Up site to learn how to take action to fight wealth inequality.

Tax Alliance for Economic Mobility | Campaign Website
The Tax Alliance for Economic Mobility, co-chaired by CFED and PolicyLink, convenes racial justice advocates, asset-building advocates, tax reform experts, and researchers to identify near- and longer-term policy priorities to expand savings and investment opportunities for lower-income households through reform of the U.S. tax code.

Enhancing and Expanding the EITC for Low-Wage Workers | Policy Brief (March 2017)
The Earned Income Tax Credit (EITC) is both a powerful income and wealth-building tool. This policy brief lays out four key recommendations for Congress: 1) Expand EITC eligibility to workers not raising children; 2) Simplify EITC eligibility by relying on other programs' "qualifying child" determinations; 3) Increase the accuracy of EITC returns by establishing minimum competency standards for paid tax preparers; 4) Empower taxpayers to save for emergencies by establishing a Rainy Day EITC program.

The EITC: A Powerful Savings Program for Low-Income Workers | Policy Brief (July 2015)
The Earned Income Tax Credit is an essential tool for helping low-income families build emergency savings. There are steps Congress can take to improve financial security for more Americans by strengthening the EITC.

The Rainy Day EITC: A Reform to Boost Financial Security by Helping Low-Wage Workers Build Emergency Savings | Federal Policy Proposal (July 2015)
This Policy Brief outlines a new proposal to help give low-wage workers a tool to build emergency savings at tax time. A Rainy DAy EITC means a real financial cushion later in the year, after the boom times of tax season have receded into memory.

From Upside Down to Right-Side Up: Redeploying $540 Billion in Federal Spending to Help All Families Save, Invest and Build Wealth  | CFED Report (2014)
This comprehensive analysis takes a hard look at the $540 billion in spending on federal tax programs that support asset building through homeownership, retirement savings, liquid savings and higher education, spending that isn’t helping most low- and moderate-income households.

Leveraging Tax Time to Build Financial Security

At the beginning of every year, the vast majority of American households turn their attention to the ritual of filing their federal and state income tax returns. Some see it as a civic duty, others as a burdensome chore. But for tens of millions of low- and moderate-income families and individuals, tax time represents a springboard to economic opportunity and financial security.

The Urgent Need for Basic Competency Standards for Paid Tax Preparers | Federal Policy Brief (January 2017)
Filing and processing returns accurately at tax time is a challenge for filers—and for the government. Fifty-six percent of tax filers earning less than $30,000 annually seek professional tax preparation assistance. Without an accurate return, tax filers do not receive the full benefit of tax credits to which they’re entitled under law

Strengthening VITA to Boost Financial Security at Tax Time & Beyond | Federal Policy Brief (June 2016)
For nearly 50 years, the VITA program has trained volunteers to help millions of low income Americans file their taxes for free. VITA needs to be authorized by Congress and strengthened. Local sites also need more flexibility and resources to support innovation. View the more detailed VITA Federal Policy Proposal here.

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More Resources

Tax Alliance for Economic Mobility | Advocacy Community
The Tax Alliance for Economic Mobility is a national coalition that brings together a broad range of stakeholders interested in building a tax code that is inclusive, progressive and equitable, one that expands tax-code based savings and investment incentives for lower-income working families.

Tax Credits for Working Families | State Resource Guide (October 2012)
To augment low wages, federal and state governments have increasingly used tax credits to help families escape poverty and put them on a path to prosperity.

Building Economic Security in America’s Cities: New Municipal Strategies for Asset Building and Financial Empowerment | CFED Report (January 2011)
This report examines how municipal governments help families build assets and wealth.

State Stroke of a Pen Guide | CFED Report (November 2011)
This guide to achievable state policy includes information on how to reform the tax code in ways that will help families build financial security.

Upside Down: The $400 Billion Federal Asset-Building Budget  | CFED Report (2010)
An investigation into federal expenditures aimed at encouraging savings and investment, and how they primarily benefit the wealthiest Americans.

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