Patch Blog: Depriving Immigrants of 'Child Tax Credit'

Eliberto bought his four-year old boy a tricycle last year. This year, with the tax refund he will receive, he would like to get his older son a toe-pedaled, mini fire engine truck. His two-year old boy will settle for a considerable amount of Pampers, Gerber puree, and two sets of new outfits. 

Come next year, Eliberto and his wife Sonia once again will file their income taxes using an Individual Taxpayer Identification Number (ITIN). But they will receive nothing in return from Uncle Sam if the U.S. Congress approves a proposal to tax the children of the poor.

Eliberto’s two sons are U.S.-born. He and his wife are undocumented immigrants, and because they cannot have a Social Security number, they use an ITIN instead to file their yearly tax return.

The money that the couple gets from the IRS’s Child Tax Credit program—the only one they qualify for—is spent almost entirely on their children, said Eliberto, who did not provide a last name to protect his family. The Van Nuys resident earns about $20,000 a year through full-time employment and says that every two weeks approximately $154 disappear from his already small paycheck to pay federal and state taxes.

Squeezing Child Tax Credit

Eliberto and Sonia are really worried. Talk of Congress moving forward with a proposal to restrict the Child Tax Credit and the Additional Child Tax Credit refund only to taxpayers who have a Social Security number will impact their family budget and that of more than 2 million working families who pay income and payroll taxes. Hard-working families and low-income families reportedly pay more than $9 billion in payroll taxes each year. Eliberto pays $5,544 in taxes every year but receives $2,000 in return as part of the ACTC program.

“If I don’t get that little bit of help for my children, it will affect what I buy for them,” he said. “With that money I buy food, clothing, diapers, medications, and if I have any left over, a couple of toys.” He added: “They are getting older and now they ask me to get them little things to play.”

Anti-Immigrant Bias

Republicans in the House came up with this anti-immigrant and anti-family scheme as a way to pay for the extension of the payroll tax cut. If this exorbitant tax hike is imposed, the working poor, Latinos, immigrants and the neighborhoods they live in will suffer. This monstrosity of a proposal will have the most devastating impact on children: It is estimated that up to 5.5 million children, including 4 million who are U.S.-born citizens, will have this safety net yanked from under their feet overnight.

Eliberto does not understand the political maneuvering pushing this bill forward. He worries, though, that in addition to his family, lots of middle-class families and mom-and-pop businesses that serve our communities will be seriously affected because, as he puts it, “we will not be shopping there for a while.”

Negative Impact on Local Business

He is right. Studies have shown that every dollar received by low-income and moderate-income families has a 1.5 to 2 times multiplier effect in terms of its impact on local economies. Based on Eliberto’s wish list, most of this year’s ACTC refund will be spent in local stores and shops.

The irony is that while Congress has been consistently unable or unwilling to serve the American people by adjusting our immigration laws, they are willing to hurt the general public by making a point about immigration through this proposal.

Dumb Economics

Perhaps we will save a lot of money by denying eligibility to ITIN taxpayers for ACTC, you may be thinking. The savings barely compute. The bill is estimated to save $9.6 billion in more than 10 years—a period during which these same taxpayers will contribute $90 billion to the federal coffers.

I get that Congress must find ways to pay for the payroll benefits it will likely extend. I get that something has got to give. But to take this life-saving financial assistance away from the hands of taxpayers who are barely getting by is reprehensible. More than 60 percent of families using the refundable CTC earn less than $25,000 per year. According to a 2009 report, the ACTC credits protected approximately 1.3 million children from falling into poverty.

Seeing is Believing

Those are the numbers. The real impact can only be felt when you meet families like Eliberto’s, which do what they must to protect and feed their children but also do their best to comply with their civic duty—including paying taxes and filing returns.

“I have thought about not filing my returns,” says Eliberto. “But I know that it is my responsibility and I want to help this country get stronger so that my family has a future here.” 

Latinos Hardest Hit

Eliberto’s family is of course Latino. The bill in question will hit the Latino community hardest because 80 percent of those impacted are Latino families. Of the estimated 15 million children living in poverty in the U.S., 40 percent are Latino children. Eliberto asks me why Congress is attacking his family. His children can be heard playing in the background—and I have no real answer for him. 

So far, Congress has failed to address why it is necessary to target a vulnerable population such as the 4 million U.S.-born children and their undocumented parents. Saving estimates pale in comparison to the robust contribution low-income families make to our economy in payroll taxes each and every year. 

Blaming Immigrants

In this politicized environment—in which just about everything is the fault of immigrants—we must caution members of Congress to thread carefully and not overreach. As members of the general public, we must ask our national leadership why this Herod-like persecution of children is necessary.  

Many of us may be against granting some benefits to undocumented workers, even if they pay their fair share of income and payroll taxes, but few of us will have the heart to keep Eliberto’s U.S.-born sons from getting a mini fire engine truck, the Gerber puree, and a supply of Pampers.

For more information, please visit www.chirla.org, the National Immigration Law Center or the National Council of La Raza.

Jorge-Mario Cabrera is the director of communications at the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA).