WHAT SHOULD I BE DOING INSTEAD OF THIS?
 
April 13th, 2012 By Kevin Osborne | News | Posted In: Taxes, Public Policy, Poverty, Economy, Family

Group Pushes for Ohio Tax Change

Think tank: EITC would help working families

eitc

A nonpartisan think tank that advocates for poor and working class families is urging that Ohio adopt its own version of the federal Earned Income Tax Credit (EITC).

 

The group, Policy Matters Ohio, said a state version of the federal tax credit, set at 10 percent, would divert just $210 million from Ohio’s coffers but would benefit 949,000 low-income working families across the state.

Such a credit would provide families with an average of $221 each, which Policy Matters Ohio described as “modest but helpful.”

 

Currently 24 states and the District of Columbia have Earned Income Tax Credits, ranging from 3.5 percent to 50 percent of the federal credit.

 

“A state EITC program enables families to work and build assets while reducing the impact of regressive income tax changes,” said a statement released by Policy Matters Ohio.

 

“A state EITC makes sense because recent changes to the personal income tax have provided greater tax reductions for higher-income earners than they have for lower- and middle-income families,” the statement continued.

 

The federal EITC is a refundable tax credit for low- and medium-income individuals and couples, and is considered the nation’s largest poverty relief program. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who qualify and claim the credit.

 

To qualify for the EITC, a recipient must have earned income of $49,000 or less. The credit is worth significantly more for families with children and is refundable, which means families receive cash refunds above their tax liability.

 

Created in 1975, the federal EITC is aimed at helping lift families with children about the poverty level, along with offsetting the burden of Social Security taxes and maintaining an incentive for people to work.

 

In Ohio, 949,692 people currently claim the federal EITC. The credit generates $2.1 billion for state residents, and the average refund is $2,211.

 

Founded in 2000, Policy Matters Ohio is a nonprofit, nonpartisan policy research organization that seeks to create “a more prosperous, equitable, sustainable and inclusive Ohio,” through research and policy advocacy.

 

Based in Cleveland and Columbus, the organization is funded primarily through grants from groups like the Ford Foundation, the Sisters of Charity Foundation, the Center on Budget and Policy Priorities, the Corp. for Enterprise Development and others.

 
comments powered by Disqus
 
Close
Close
Close