Advocates Praise Passage of Earned Income Tax Credit
by Christine Stuart | Nov 22, 2011 6:27pm
(5) Comments | Commenting has expired
Posted to: State Budget
Even though some of the advocates in the room Tuesday complained that Gov. Dannel P. Malloy’s budget didn’t increase income taxes enough on the wealthy, they applauded his decision to implement the state’s first Earned Income Tax Credit, which will be implemented in the upcoming tax filing season.
“This is about working families and encouraging work and making our economy strong,” Malloy said in describing the tax credit to a roomful of advocates.
Advocates, who pushed for the credit for more than a decade, gathered at the Capitol Tuesday to celebrate its passage. The celebration marks the beginning of the tax credit’s implementation, which coincides with tax return season.
Opponents of the tax credit say it offers people who don’t pay income taxes a windfall. However, advocates like Sen. Majority Leader Martin Looney said that type of opposition presents “a very narrow view of who is a taxpayer in our state.”
The close to 190,000 families that will qualify for the credit may not have any state income tax liability, but they do pay other taxes. Looney said research shows that they pay a higher percentage of their income in sales and gasoline taxes than affluent people. He said they’re also paying property taxes through their rent.
Malloy, who was credited by advocates and proponents of the tax credit, for helping them get the legislation over the finish line, said when combined with the federal EITC the state’s economy will see a boost of more than $400 million in a very short period of time.
Malloy said the state has been encouraging residents over the past few months to get a job, any job because it will put them in line for this tax credit. Malloy warned the group that their work on this tax credit program can’t stop now because it still needs to be properly implemented and people still need to know they qualify for it.
“We got to make sure that we can do everything we can to encourage every filer who may not understand it or may skip filing, because they think their earnings are such that it’s not important, to actually file their income tax return,” Malloy said.
He said he knows that with a $3.5 billion deficit some people thought his administration was crazy to budget $110 million for a state EITC.
“Doing some of the difficult things we had to do under this last state budget knowing it contained this rather large Earned Income Tax Credit made doing some of those things easier, understanding we were finding a way to help Connecticut working families,” Malloy said.
Malloy thanked Looney for being the chief proponent of the legislation for the past 12 years until the state elected its first Democratic governor in 20 years.
“What a difference it is to have a partner rather than an adversary in that position,” Looney said as he turned to Malloy.
Looney, a proponent of the tax credit since 1999, said it empowers urban families, but it is by no means an exclusively an urban program.
“There are EITC recipients in just about every community in the state,” Looney said.
And despite the arguments of opponents, “They are in fact taxpayers and that is what this EITC finally recognizes in Connecticut.”
He said much of the EITC will be spent in those same communities where it was earned by those working families.
Jim Horan, executive director of the Connecticut Association of Human Services, said his organization got involved with advocating for an EITC in 2005 after they saw how the federal EITC transformed lives.
The National Center for Children in Poverty found that the federal EITC reduces poverty for young children by nearly 25 percent—more than any government program.
Department of Revenue Services Commissioner Kevin Sullivan said this program helps taxpayers and working families in the state of Connecticut.
“We know that despite the greater progressivity that has been added under the governor’s leadership to the income tax this year that lower income working families still do pay a higher proportion of their disposable income in taxes than folks anywhere else in the scale of taxation,” Sullivan said.
He said his job now is to make sure every person who has “earned and deserved this tax credit” gets it.
Tags: earned income tax credit, EITC, Malloy, Looney, taxes
(5) Comments
posted by: Hoosier@CT | November 23, 2011 9:21am
This is both a redistribution of wealth (Government deciding for us how our money is spent) and pandering to low income. The low income people already recieve benifits, but returning tax money that they never gave? This item will be front-and-center on the list of reasons not to re-elect officials who voted in favor of this Hand-out.
posted by: Noteworthy | November 23, 2011 10:34am
A pol is in office too long when like Martin Looney, he can’t remember what the opposition actually says.
The EITC will not cost $110 million - that’s a one year figure. It will cost closer to $250 million across the two year budget. without Malloy/Looney’s $3 billion in tax hikes, which fell heaviest on the middle class who are barely hanging on, this wild new spending would not be possible.
Further, it’s not just that the recipients don’t pay income taxes as Looney says. It is that under this fake economic boost which simply transferes money from one working family to another more favored group, these people will have ZERO skin in the game. They will in effect pay ZERO not just in income taxes, but pay ZERO in gas, sales and use taxes. Nothing. Nada. Zip. Zilch.
In the highest tax state in the nation, they will pay nothing to live here. They won’t pay for libraries, education or healthcare; nothing on the state debt; nothing for DSS or for public safety. Nothing.
Sorry. But the EITC is a farce, a giveaway which at the end of the day, allows a favored group of CT residents to live here for nothing yet benefit from everything. There is no free lunch. No free ride. If you don’t pay, you don’t care. It’s that simple.
Malloy and Looney ought not to be celebrated. They ought to be shamed for their myopic and twisted views that are breaking CT families and lowering the standard of living for millions of people while doing nothing that stablizes our state budget. They just made it worse. Congratulations.
posted by: NOW What? | November 23, 2011 5:08pm
The State EIC is *not* a “farce,” not by a long shot. The alternative would have been to increase the state’s welfare benefit, an increase which would’ve gone primarily to the unemployed poor. At least the EIC is available only to people who actually make the effort to get a job, albeit a very low-paying one. And every penny of the EIC will be used to pay for individuals’ and families’ daily life necessities. It was a SMART move, and in the long run probably will actually only cost the State about half of what has been reported… indeed a VERY small - practically miniscule - price to pay to help ensure that children and families don’t go hungry through no fault of their own.
posted by: Noteworthy | November 25, 2011 9:32am
Now What:
The projected quarter billion cost across this two year budget was predicated on specific projections. Your idea that it will cost less is dubious at best. Likewise, your idea that the alternative would be to increase the welfare payments. That’s simply not true. The farce is saying that EITC will be an economic driver. That is patently false and I object to Looney/Malloy lying about it. This money will be used to paying rent, buying food and paying the utility bills. It is not going to be spent eating on Chapel Street, or buying from a boutique or small business. Like the middle class, these families are barely hanging on. Thanks to Malloy’s $3 billion in tax increases and his wild ass borrowing, it’s now costing us more than ever to live here and the ability of a vast majority of CT families to hang on is now worse. Not better. But at least for the favored class of working or semi-working poor, they will now pay nothing to live here. And those who have better than minimal jobs will now pay for them to live for free. That’s akin to living in a house, but never having to make a single mortgage payment.
posted by: Careful | November 27, 2011 3:55pm
Noteworthy: You tell it like it is, thanks to Gov. Malloy’s $3 billion dollars in tax increases and his wild ass borrowing—the State of Connecticut is at at point of—“no return to solvency.”
And, Malloy’s curse on Connecticut, still has over a full year to go! Dannel, and a leader-less General Assembly—are far from finished in drowning Connecticut in red ink. Then Dannel Patrick will improve on his pre-election Town Hall meetings-necessity-priority of—“raising taxes!”