Sens. Sherrod Brown (D-OH) and Dick Durbin (D-IL) have introduced legislation that would make permanent two tax credits aimed at reducing poverty and helping low-income and working families. Two dozen other lawmakers have signed onto the legislation, which would also expand eligibility for the Earned Income Tax Credit (EITC) and the Child Tax Credit, which were originally expanded by the 2009 stimulus law and were extended temporarily by the deal to avert the fiscal cliff in January.

The tax credits have received bipartisan support in the past, a point Brown and Durbin made in a release announcing the legislation, The Hill reports:

“Enhancing the earned income tax credit should be a bipartisan goal, as President Reagan called EITC the most effective tool in fighting poverty,” Brown said in a statement. “We need to reward Americans who work hard and play by the rules and ensure that they can work and continue to take care of their families.”

“This bill is pro-family, pro-work legislation that would permanently extend critical refundable tax credit provisions that have helped lift millions of working families out of poverty,” Durbin added.

Combined, the EITC and child credit kept 9.4 million people out of poverty in 2011, according to data from the Center on Budget and Policy Priorities. Nearly 5 million of those were children, and the stimulus expansion kept 1.5 million more out of poverty than the original credits would have. Since then, though, Republicans in Congress have sought to roll back those extensions in different tax plans put forth in the House and Senate.

That would be a mistake, since the tax credits don’t just keep families out of poverty — they also increase future earnings for children who benefit from them, according to CBPP. Brown and Durbin’s legislation would ensure that more families — and more children — would be able to take advantage of those benefits in the future.

President Obama’s latest budget doesn’t just take aim at the tax code by raising $580 billion in new revenues by closing loopholes, limiting deductions for the wealthy, and instituting the Buffett Rule. It also made the expansion of the Earned Income Tax Credit (EITC) included in the 2009 stimulus package permanent. This refundable credit is aimed at giving poor and working people more income. But research also shows that the benefits extend beyond the workers to their children.

The Center on Budget and Policy Priorities found that the children of EITC recipients do better in school, are likelier to go to college, and earn more when they enter the workforce:

As the graphic above illustrates, for every $3,000 in EITC income a family receives, a child goes on to work 135 more hours a year as an adult and to earn 17 percent more. Beyond educational and financial outcomes, the children who live in families that receive EITC credits are likely to avoid the early onset of disabilities and other illnesses that are associated with child poverty. The EITC may also help infants by reducing low-weight and premature births.

Interestingly, the EITC can have similar benefits for parents by boosting their employment rates. Overall, income from the EITC and the Child Tax Credit kept about 10 million people out of poverty in 2011. Many of those people, 1.5 million, owe their eligibility for the credit to the stimulus’ expansion, the one that Obama is seeking to make permanent. Republicans, for their part, have repeatedly tried to roll back that expansion, which could have serious impact on low-income parents and their kids.

The combined punch of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) lifted almost 10 million Americans out of poverty in 2011, according to the latest round up of the numbers by the Center On Budget and Policy Priorities. Last year, the two programs kept almost 5 million women alone out of poverty.

Both credits are built into the income tax code and both were expanded by the stimulus bill passed in 2009. The EITC is fully refundable — if the value of the credit exceeds an individual’s total income tax burden, the remaining balance is paid back to them — and the CTC is partially refundable. This means both credits work as added boosts to the paychecks of low-income and working class families. Put it all together, and CBPP found that 9.4 million people, including 4.9 million children, were kept out of poverty by the two programs in 2011.

As the chart shows, 1.5 million of those Americans owe their eligibility for the credits to the expansion that came with the stimulus — an important point, since the Republicans have made repeated attempts to roll those expansions back.

This is especially galling because both the EITC and CTC have features conservatives should applaud: first, because someone has to earn an income to qualify for them, the credits operate as an economic incentive to find work. Second, eligibility for both credits phases out gradually, minimizing any “welfare trap” effects. And third, because they’re credits rather than deductions, the money they provide is more focused on Americans in need, with less excess spending higher up the income ladder.

Beyond their poverty reducing effects, CBPP also found that families that benefitted from the credits saw their children go on to earn more as adults (when parents are stuck in low-wage work, it has damaging ripple effects for their children) and that the EITC specifically has done far more to increase employment amongst single mothers than either the GOP’s much touted welfare reform in the 1990s.

Bucking the national trend of asking the poor to pay more in taxes while giving breaks to the wealthiest Americans, Maine’s House of Representatives this week approved an expansion of the Earned Income Tax Credit and rejected an attempt to cut capital gains taxes.

A handful of states have done the opposite recently. Arkansas, Ohio, Louisiana, Nebraska, Wisconsin, Kansas, Oklahoma, and North Carolina‘s legislatures have all backed efforts to lower taxes on the rich. But Maine’s legislature is looking to give more money to those who need it most instead of the rich:

Portland Democrat Rep. Peter Stuckey’s bill, LD 455, An Act to Increase the State Earned Income Credit, would double the state earned income tax credit for low-income individuals and families to 10 percent of the federal earned income tax credit and make it fully refundable at the state level.

Democrats said the bill would provide financial relief to those who need it most, people who are likely to spend the money locally on necessities such as rent and groceries.

“We heard over and over again that the people who are going to get this credit are going to buy groceries, gas for their cars, and pay their rent,” said Rep. Adam Goode, D-Bangor, who co-chairs the Legislature’s Taxation Committee. “These are people we are sure are going to spend the money right away.”

Those who backed the capital gains tax cut in Maine, the same people who oppose the EITC expansion, incorrectly believe that a capital gains cut will help boost the economy. In actuality, the Congressional Research Service has found no correlation between economic growth and lower capital gains taxes.

On the other hand, the federal version of the EITC helps boost both employment and education among the poor. In 2011, 4.9 million children, and 9.4 million people overall, were lifted out of poverty thanks to the federal EITC.

Last year, the Census Bureau began releasing the Supplemental Poverty Measure (SPM) alongside the official measure its been using since the 1960s, in order to provide lawmakers with a more sophisticated picture of poverty in America. The Census Bureau today released its updated report on the SPM for 2012, which showed that about 16 percent of the country is living in poverty, roughly the same as last year.

Using that new data, the Center for American Progress determined that, all told, federal programs aimed at helping struggling Americans lifted more than 25 million people out of poverty in 2011:

Refundable tax credits for working families such as the earned income and child tax credits, for example, lifted 8.7 million people out of poverty in 2011, and the child poverty rate would have been 6.3 percentage points higher without them. Similarly, the Supplemental Nutrition Assistance Program lifted 4.7 million people out of poverty in 2011. Without it, the child poverty rate would have been 2.9 percentage points higher.

The official poverty metric used in America since the 1960s takes the basic food diet for a household, accounts for various family compositions, multiplies that by three, and then looks at whether a family’s gross income before taxes and transfers meets that threshold. But that approach leaves out several important factors, including changes in family structures and circumstances since the 1960s, expenses such as clothing and medical costs, and geographic variation. And while it considers the effects of some government spending such as Social Security and welfare, it ignores others, as well as with the effects of many tax credits that help millions of American families.

A mere 7,450 of the wealthiest estates in the country could receive an average tax break of $1.1 million in 2013, while over 13 million low-income families could see their tax burden increase by $1,000 or more, if proposals by the GOP were to go into effect, according to the Center On Budget and Policy Priorities. The legislation, drawn up by Senate Republicans and already passed by House Republicans, would preserve through next year a cut to the estate tax that was enacted in the December 2010 tax deal. Meanwhile, it would allow expansions of the Earned Income Tax Credit and the Child Tax Credit passed in that same deal to expire.

As the CBPP noted today, the asymmetry in who would and would not benefit from these proposals, and by how much, is striking:

Relative to the 2009 estate-tax parameters, the estate-tax break enacted at the end of 2010 benefits only the heirs of estates that have assets in excess of $3.5 million for an individual and $7 million for a couple. 

For the estates that receive it, the estate-tax break enacted in 2010 is worth an average of $1.1 million per estate, relative to the 2009 parameters, according to the Tax Policy Center. […]

For many lower-income working families, the impact of losing the tax-credit improvements would be substantial. For instance, a married couple with three children that has earnings at the estimated poverty line for 2013 ($27,713 for a family of that size) will receive $1,934 less in combined CTC and EITC benefits next year if policymakers let the improvements expire.  Similarly, a single mother with two children working full time at the minimum wage — and earning about $14,000 — will receive a CTC of just $173 in 2013 instead of $1,725.

The cost of continuing the EITC and CTC through 2013 comes out to $3.4 billion and $7.6 billion respectively, for a total of $11 billion. The cost of the estate tax cut for its original two year period was $23 billion, suggesting an extension for another year would roughly equal the cost of extending the tax credits.

In short, the Republicans are proposing to recoup new revenue by raising taxes on 13 million American families, while losing roughly the same amount of revenue in order to give a minute, rarified group of the wealthiest Americans another year of enormous tax cuts.