By Jen Singeisen
Too many in our community struggle to step up into the middle class, even as they strive to do all the right things to work their way up the economic ladder. More than a quarter of Savannah’s residents live in poverty. Many neighborhoods have seen jobs vanish and incomes fall over the past three decades. When hardworking people can’t get ahead, it weighs down the economy as a whole and undermines our community’s ability to thrive. At Step Up Savannah, we engage all sectors of the community to improve the economic mobility and financial stability of families. Helping people step up benefits us all; studies show a strong link between broad-based opportunity and economic growth. Low economic mobility and financial stability are community-wide issues that diminish our overall economic potential.
While there is no silver bullet for the complex challenges facing families today, but state leaders do have some proven tools at their disposal. This legislative session, our state lawmakers can enact a time-tested policy with strong bipartisan support to give an economic boost to working families.
Today is EITC Awareness Day, a chance to recognize the enormous impact the national Earned Income Tax Credit (EITC) has on our community. Created in 1975, the EITC is a federal policy that cuts taxes for low-wage workers like cashiers and nurses, providing a wage boost for families moving toward the middle class. In 2017, about 32,000 Chatham County families will claim the national EITC, bringing in nearly $100 million to our economy.
Georgia can build on this success by enacting a Georgia Work Credit, a state version of the EITC. To be eligible for the credit, recipients must work; making this a great incentive to keep folks in the workforce. Many are seeing this as a viable alternative to raising the minimum wage. A Georgia Work Credit would provide a tax break up to help working families make ends meet. Evidence from the EITC and other states shows that a Georgia Work Credit would help families in Chatham County work their way to the middle class by making key investments, saving for a rainy day and making sure bills get paid. A Georgia Work Credit would also help children as research has shown that the EITC is linked to healthier babies, better school performance and higher earnings later in life. More than helping individual families, the Georgia Work Credit would also pump over $8.7 million into our local businesses.
The General Assembly should take a page from our Chatham County Legislative Delegation and take a serious look at the potential of a Georgia Work Credit as a vehicle to provide a bottom-up tax cut to working families. A Georgia Work Credit would help build the middle class, impart lifelong benefits for children and provide a pivotal step up the economic ladder for thousands of families in our community.
In honor of #EITCAwarenessDay, learn how a state Earned Income Tax Credit (EITC) would positively impact our state and community.
How a state EITC would benefit families –
A state Earned Income Tax Credit (EITC) would provide a bottom-up tax cut that would benefit more than a million Georgia families and put an estimated $270 million back into the pockets of working Georgians.
More specifically it would benefit:
- An estimated 770,000 working mothers and 410,000 working
- An estimated 80,000 military veterans and their
- An estimated 2 million children.
- Over a million Georgia households representing 6 million Georgians.
Georgia should create a state Earned Income Tax Credit to help Georgians with jobs afford the basics and work their way into the middle class.
- The tax credit lets low- and moderate-income working families keep more of what they earn to help meet basic needs and pay for things that allow them to keep working, such as child care and transportation.
- This helps families as they get a toehold in the workforce or deal with temporary setbacks like having their hours or pay reduced or a family breadwinner laid off.
- For families with very low wages, the credit increases with each dollar earned, which encourages them to work more hours. That additional experience in the workforce can lead to higher pay and better opportunities. The tax credit phases out after recipients reach a modest income level.
- This tax credit offers working families a hand up by encouraging and supporting work and reducing use of public assistance. It’s a modest investment that can make a big difference in the lives of working families.
- If someone doesn’t work and pay taxes, they can’t receive this help. It only goes to people who earn income through low-wage work, most of them raising children.
How a state EITC would benefit small businesses, local economies and Georgia’s future workforce.
- The Earned Income Tax Credit boosts local economies across the state by helping low-wage workers keep more of their income, which they spend at local businesses to buy groceries, pay for car repairs, or afford child care.
- And businesses like this tax credit because workers who can pay for basic necessities are more dependable employees because they can better afford reliable transportation to get to work and child care for their kids.
- The EITC is a proven tool to strengthen tomorrow’s workforce because young people receive an outsized benefit. Research finds that children and young adults in families receiving the EITC do better in school, graduate high school and attend college and succeed in the workforce.
To view full report: the case for a state Earned Income Tax Credit
Download Georgia Budget & Policy Institute’s State EITC Fact Sheet
ABOUT NATIONAL EITC AWARENESS DAY
EITC Awareness Day is a national grassroots effort to draw attention to the Earned Income Tax Credit and the enormous positive benefit it has on working families across the country.