Helping the working poor

Earned income credit: Higher refundable credit is best anti-poverty step lawmakers can take.

April 01, 2000

SO FAR this legislative session, poor people have not fared well. They got short shrift in the governor's budget, and the General Assembly has not altered matters much.

Yet there's still time to give the working poor a boost through an effective anti-poverty program: the Earned Income Credit (EIC).

It's modeled after a highly successful federal program. The idea is to make work pay by giving the lowest-salaried employees with children help at tax time. For those whose earnings put them below the poverty level, this means a cash refund to help offset work-related costs and make ends meet.

The state EIC refund is pegged at 10 percent of the federal tax credit and is slated to rise to 12.5 percent this year and 15 percent next year. Two competing bills in the legislature would give the working poor a bigger boost now.

Under the Senate version, the EIC would jump to 15 percent of the federal credit this year at a cost of $8 million. A competing House proposal would accelerate the state EIC refunds to 25 percent this year, at a cost of $46 million.

For a mother with two children earning the minimum wage on a full-time job, the Senate version would provide her with an extra $119 in tax refunds -- hardly a king's ransom. The House version would mean an extra $526.

For families teetering on the edge of survival, such refunds could make the difference: new shoes or clothes for the kids, or money for medicine, child care or transportation to work.

This ought to be a legislative priority. Sadly, it isn't. The chief tax measure in Annapolis concerns slashing the state's inheritance tax, a levy that affects more affluent Marylanders.

There's greater urgency to address problems of the poor. Equity demands the working poor not be forgotten in the rush to give comfortable Marylanders a tax break.

Before lawmakers finish work on the state budget, they should see that there's money in it for a larger refundable earned income credit to encourage low-income workers.

The state's most vulnerable citizens deserve the most attention from lawmakers.

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