EITC Awareness Day highlights one of the most important federal tax credits, the Earned Income Tax Credit. Hopefully, this day will also draw attention to the need for the 2013 Oregon legislature to extend Oregon’s own EITC, which is currently scheduled to expire at the end of 2013.
This infographic (click it to enlarge) and fact sheet from the Center for American Progress does an excellent job at summarizing the importance of the federal EITC. Nationwide, the credit lifted 3 million children out of poverty in 2011. It also helped 27 million working households whose jobs, sadly, don’t pay enough to make ends meet.
The EITC, however, doesn’t just help the children and families who claim the credit; it helps the entire nation. As the Center explains, the EITC
also leads to positive outcomes for family health and student education. Earned income tax credit dollars benefit our economy, and most families who receive the credit end up paying billions of dollars more in net federal income tax than they receive in the earned income tax credit over time.
Oregon has its own modest EITC, which complements the federal credit and advances the same goals. Oregon’s EITC is small, just 6 percent of the federal credit. But it makes a difference in the lives of about a quarter million low-income, Oregon working families with children and the communities in which Oregon EITC families live (PDF).
That is why one of the top priorities of the 2013 legislative session must be to renew the Oregon EITC.
Besides extending the life of the credit, the 2013 legislature should follow Governor Kitzhaber’s recommendation to increase the size of Oregon’s EITC. Doing so would make our credit even more effective in helping low-income working families make ends meet. And it would help lay the groundwork for a stronger Oregon.