A Win for Women, Mothers and Working Families
This week, President Obama laid out an agreement on tax cuts and Unemployment Insurance that directly benefits women, mothers and working families. The agreement not only secures vital tax relief and investments in America’s workers that will create jobs and accelerate economic growth, it also contains specific policies that provide targeted support for working families, particularly women and mothers.
The agreement will extend key provisions including the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) that disproportionately benefit women and working families. The American Opportunity Tax Credit (AOTC) is an additional benefit which gives working families and students a $2,500 per year partially refundable tax credit to help students and their families cover the cost of college tuition. Together, these credits will get women and their families on the road to economic recovery.
A closer look at the framework shows that women represent about 60 percent of the parents who will benefit from the EITC and CTC expansions in the agreement. Families headed by single mothers are among the most economically at risk in our fragile recovery, and this extension of the EITC and CTC would direct substantial resources to these families. In fact, an estimated 4 million of the families who will gain from this agreement are headed by a single mother – that’s one out of every three families who will gain from the extension of these credits.
A tangible example of someone who would benefit from the framework agreement on tax cuts and Unemployment Insurance highlights the importance of moving forward. In Columbus, Ohio, a single mother working as a cashier with two children aged 5 and 8 has an income of $16,900, the median salary in her profession in Ohio. The middle class tax cuts renewed under the framework provide this family with a tax cut of $620. In addition, due to priorities the Administration insisted on in the package, the framework provides the family with about $1,720 in further tax relief:
- Expanded Child Tax Credit: Under the agreement, she would receive $2,000 in child tax credits, compared to about $620 if only the 2001/2003 tax cuts were extended – an increase of about $1,380.
- A new 2% payroll tax cut: Due to the about 2% payroll tax cut for employees included in the agreement, this family would receive about $340 in tax relief.
As you can see, this isn’t just a theoretical debate. This tax plan will have a direct impact on the lives of Americans across this country every day. President Obama has stood with the middle class his entire career and this bill is just one more example of his commitment.
For more information on framework tax agreement, please read How the Tax Deal Benefits Women and Families.
Valerie Jarrett is Senior Advisor to the President and Chair of the White House Council on Women and Girls
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