A Piece of Reaganomics: Helping Utah Families Get Ahead

Military dad small from VoicesPost by Tracy Gruber, Esq.

Last week, Utah lawmakers took an important first step toward reducing state taxes and bolstering the pocketbooks of low- and moderate-income working taxpayers struggling to make ends meet. The Working Individuals and Families Credit (HB218)—a tax credit based on the federal Earned Income Tax Credit—received initial approval from the Revenue and Taxation Committee and the bill now moves to the Utah House for a vote.

Although Utah’s economy is rebounding, many Utah workers remain poor. Many of our new jobs are not providing salaries sufficient to meet the basic economic needs of Utah families. In homes where basic economic needs cannot be met children suffer. There are over 250,000 Utah taxpayers who are working but struggling to support themselves and their families and who would benefit from HB218.

Today, nearly one in six Utah children lives in poverty. Nearly half (52,000) of those children are living in intergenerational poverty. The Working Individuals and Families Credit, by itself, will not end intergenerational poverty. But by bolstering the federal EITC, Utah can  encourage and reward people for working more  and put people on the path to self-sufficiency. Moreover, many low-income workers are only an illness, a layoff or even a car repair away from financial devastation; the Utah credit would help them overcome these hazards

President Reagan called the federal EITC “the best anti-poverty, the best job creation, the best pro-family measure to come out of Congress”. In 2010, it kept 33,000 Utah children from poverty.

The Working Individuals and Families Credit will do more than cut taxes for working Utahns–it will invest in their children and our local communities. Children living in families receiving the federal EITC, experience improved health, academic achievement and greater lifetime earnings, decreasing the risk of a lifetime of poverty—benefits which the Working Individuals and Families Credit will expand .

The investment in Utah taxpayers will also generate economic activity in communities throughout our state. Because the credit will reduce taxes for low- and moderate-income workers, these individuals will have additional resources to meet the basic needs of their families. As is the case with the federal EITC, the state credit will be largely spent in our small businesses, helping them continue their recovery from the Great Recession.

Today, twenty-five states have adopted tax credits similar to the Working Individuals and families Credit. It is time for Utah to make this modest investment in our low-income workers who continue playing a valuable role in Utah’s re-energized economy. 

 Tracy Gruber, Esq. is the Director of State Fiscal Policy at Voices for Utah Children.

 

This post originally appeared on Utah Moms Care

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