Democrats want expanded low-income tax credits in tax-break package

Specifically, Senate Minority Leader Harry Reid said Tuesday that Democrats are demanding that the child tax credit be indexed for inflation as part of a deal on the so-called tax “extenders.”

“Until we get that done, we aren’t going to be able to do anything else,” the Nevadan said during a press conference about Congress’ work on the package, which congressional negotiators are hoping to pass in the upcoming weeks.

“We want some kind of middle-class parity,” Reid said, referring to the fact that the majority of the tax breaks benefit companies.

Sen. Ron Wyden, the top Democrat on the tax-writing Senate Finance Committee, suggested that his party was making progress on getting its priorities included in the deal.

“I’ve think we’ve made some real headway in terms of showing how important that is to getting a balanced package,” the Oregon senator said to reporters in the Capitol.

Wyden said Democrats are making progress on expansions of three low-income or middle-class tax credits: The Earned Income Tax Credit, which provides a refundable tax credit for very low-income workers, the Child Tax Credit, and the American Opportunity tax credit, a credit for college expenses created in President Obama’s 2009 stimulus bill.

“Our argument has been from the very beginning that there has to be a measure of fairness,” Wyden said.

Congressional negotiators are working on a deal on the extenders, which comprise dozens of individual tax breaks, some of which have been renewed dozens of times. A similar effort to extend and make permanent some of the breaks last year fell apart in the late hours partly because of the White House’s objections that low-income tax credits were not extended.

The Child Tax Credit provides up to $1,000 for each child under age 17. That dollar amount is not currently indexed for inflation, meaning that its value declines each year prices rise. A measure set to expire in 2017 makes the credit refundable for more families.