OpEd: California earned income tax credit would boost working families

Friday, June 5, 2015

By Senator Connie M. Leyva

Daily Bulletin

Right now, the California Legislature is considering a state version of the federal earned income tax credit (EITC). The EITC is potentially one of the most impactful actions that we can take on behalf of the lowest-earning working families and individuals. This important proposal would positively affect an estimated 825,000 families and 2 million individuals in the Golden State.

The state EITC would come at a critical time. The majority of poor people in California are working families who are struggling to make ends meet even though they are employed. Despite the economic gains that our state has made in recent years, many Californians are still struggling to get back on their feet after the Great Recession.

As one of the poorest regions in the country, the Inland Empire greatly needs this anti-poverty measure. Research shows that San Bernardino County is one of the counties in California that would benefit most from the EITC.

Just how would working families benefit from this tax credit? The state EITC would put cash back into the pockets of working families and enable them to reduce their debt and purchase basic necessities that they would otherwise not be able to afford. Many working families could also use the EITC refund to cover the costs of day care and transportation — key expenses that enable adults to work outside the home.

In very tangible ways, EITC also encourages work and rewards employment because the value of the credit increases as income rises before eventually phasing out at the top end of the eligibility scale. In other words, this is a hand up and not a handout.

Most importantly, children are among the biggest beneficiaries of the EITC since kids who experience the significant, long-term effects of sustained poverty have worse prospects for future success. Research shows that when you provide economic benefits to a low-income family, young children see improvements in health, school performance, college enrollment rates and higher earnings in adulthood.

A state EITC is not a new idea. More than two dozen states have enacted their own version of the EITC and some states like Rhode Island have had the EITC in place since 1986 — nearly 30 years.

It is time for California to join these states and give a hand up to working families and individuals who need this critical help the most.

State Sen. Connie M. Leyva, D-Chino, represents the 20th District.