Coalition urges Pennsylvania lawmakers to pass state earned income tax credit to help the working poor

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A diverse coalition of advocacy groups has come together to promote an anti-poverty initiative that could benefit 874,000 low-to-middle income Pennsylvania households.

The groups are pushing for Pennsylvania to become the 31st state to pass a refundable state income tax credit, which would reduce the tax burden on workers and households struggling with rising inflation while helping to boost the state’s economy.

Representatives from businesses, unions and children’s advocacy groups joined United Way of Pennsylvania officials on the steps of the Capitol on Tuesday to promote the idea that would add to the federal earned income tax credit. .

Legislation proposed in the House and Senate would provide a state earned income tax credit of 10% of the federal earned income tax credit for that year and increase it every two years up to what it reaches 25% of the federal tax credit.

Citing a study recently commissioned by the United Way of Pennsylvania, the group’s president, Kristen Rotz, said that every dollar the Commonwealth would spend to provide this tax relief to low-wage workers would generate $4 in economic growth and $3 in savings. on spending on social programs.

Filers who are eligible must fall within the federal poverty lines. They would see an average benefit of about $200 per filer with a state earned income tax credit of 10% of the federal tax credit. The benefit would increase to approximately $600 with a tax credit of 25% of the federal tax credit.

“Recently, the State House passed a bill that provides about $100 million in corporate tax cuts,” Rotz said. “It’s clear to the United Way that 2022 is the year Pennsylvania’s elected officials should also provide tax relief to inflation-ravaged households through a refundable earned income tax credit.”

The money this program would return to taxpayers’ pockets is being reinvested in local businesses, said Rep. Martina White, R-Philadelphia, who introduced the House bill. She said that in addition to meeting the family’s financial needs, it would provide an economic benefit (through increased payroll, sales and other taxes) that could help the Commonwealth cope with revenue shortfalls in the years to come. Sen. Mario Scavello of R-Monroe County is the sponsor of the Senate version of his bill.

“Pennsylvanians need all the help they can get,” said Dave Madsen, director of community services and education for the AFL-CIO of Pennsylvania. “That means Harrisburg policy makers need to step up and do all the legal press to get workers whole.”

The proposal also has the support of the National Federation of Independent Businesses of Pennsylvania and Pennsylvania Partnerships for Children.

Melissa Morgan, deputy state director of NFIB Pennsylvania, called it smart policy. She said studies show federal and state earned income tax credits boost labor force participation and hours worked, leading to higher household incomes and greater purchasing power. .

“As families receive more of their income, they reinvest in the economy by purchasing goods and services from small businesses,” Morgan said. “It’s helping small businesses and local economies recover from the pandemic.”

Meanwhile, Kari King, President and CEO of Children’s Partnerships, said it would produce a long list of benefits for children, such as reducing the incidence of low birth weight babies. birth and infant mortality rates, improved educational outcomes, increased health insurance coverage. among children, reducing child poverty rates, and addressing income inequality that contributes to higher poverty rates for Black and Hispanic families.

“Ultimately, it means a better future for our children and our families,” King said.

Jan Murphy can be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy.

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