When it comes to anti-poverty programs,
even the toughest skeptic ought to have a soft spot for the federal
earned income tax credit, which gives low-wage workers a leg up
in the world. Connecticut should build on that success by enacting
a state credit.
Created under the Ford administration
in 1975, the federal earned income tax credit encourages low- and
moderate-income families to join the work world by reducing their
tax burdens and, in come cases, even supplementing their incomes.
Studies show that 85 percent of the money generated by the federal
program goes to families 200 percent below the poverty level; the
money is typically spent on necessities, home repairs, vehicle purchases
- even education and training.
During the 1990s, the program was credited with helping lift 7 million
people out of poverty.
In Connecticut, state Sen. Martin Looney,
a Democrat from New Haven, has introduced a bill that would create
a similar credit for the state income tax by piggybacking on the
federal program. Under Mr. Looney's proposal, people would get a
refund on their state income taxes totaling 20 percent of whatever
they are due under the federal program.
Lawmakers may debate the size of Mr.
Looney's percentage (and probably will). After all, the projected
$500 million surplus presents a chance to do a lot of important
things for Connecticut - particularly, improving the state's business
climate. But there's no arguing the merits of an earned income tax
credit for Connecticut residents.
The cost of living is high. The residents
who would benefit from a state tax credit, meanwhile, are Connecticut's
working poor (for example, a family of four with an income of less
than $37,000 or an individual earning less than $12,000). Many don't
get the tax breaks enjoyed by higher-income residents for owning
a car or a home. An earned income tax credit would help level the
playing field - a least a little.
Eighteen states, plus the District
of Columbia, have their own tax credit programs. If Connecticut
were to adopt Mr. Looney's 20 percent solution, and if all of the
state's 200,000 qualifying households took part, advocates say the
program would cost about $50 million.
Considering that a state tax credit
program would put a dent in child poverty and help families share
the benefits of working and being productive members of society,
that's not a cost so much as a social investment.
Reprinted with permission of the Hartford Courant.
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