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Brian Schatz on Welfare & Poverty |
Governor Lingle wants "attention on relief for those who need it most." To this end, she is proposing an increase in the standard deduction and new tax credits on food and medicine. These aren't bad ideas, but there's a better, more cost-effective solution.
A state earned income tax credit, or EITC, is a proven policy that smartly focuses tax relief on those families with children who earn less than a living wage. Under the governor's $22 million plan to increase the standard deduction, a single parent with two children making $20,000 per year would see a measly $2 more in every paycheck. A refundable state EITC would provide that same family with a tax refund of more than $600.
