Earned in­come tax credit a key way to help work­ing par­ents im­prove liv­ing sit­u­a­tion

The Fresno Bee (Sunday) - - Opinion - BY LIND­SAY CAL­LA­HAN Lind­say Cal­la­han is the Pres­i­dent and CEO of United Way Fresno and Madera Coun­ties. She can be reached at lcalla­[email protected]

Tax sea­son is now be­hind us. This year, Unit­edWay Fresno and Madera Coun­ties pro­cessed 7,500 tax re­turns for free through the Free Tax Prepa­ra­tion Ser­vice and brought more than $12 mil­lion in tax re­funds back to our com­mu­ni­ties. What a big dif­fer­ence this made in peo­ple’s lives! Ad­di­tion­ally, 70,000 house­hold re­turns included re­funds from CalEITC, the Cal­i­for­nia Earned In­come Tax Credit.

At first glance, th­ese sta­tis­tics don’t mean much to us, do they? How­ever, peo­ple do. Peo­ple like Jackie. She took ad­van­tage of our ser­vice for the first time last year. Jackie is a sin­gle work­ing mom of three, and right off the top, she saved $150 by com­ing to us in­stead of pay­ing a tax pre­parer.

All to­tal, with tax re­funds and cred­its such as CalEITC, she was able to buy a car. The hours and hours she used to spend trav­el­ing on the bus to and from work, to col­lege and to her kids’ schools were cut down to min­utes, leav­ing her more time to work and to spend with her fam­ily.

How­ever, what Jackie re­ally wanted me to know is that the extra money she re­ceived made a big dif­fer­ence in her life, chang­ing it for the bet­ter. Shortly, she’ll be grad­u­at­ing and on the path to higher pay­ing full­time em­ploy­ment and will be open­ing many more doors of opportunit­y for she and her fam­ily.

I hear sto­ries like Jackie’s all the time: real peo­ple work­ing and yet still strug­gling to get by. She is one of 1.8 mil­lion work­ing Cal­i­for­ni­ans that re­ceived CalEITC, a re­fund­able tax credit for low-to-mod­er­ate-in­come work­ing in­di­vid­u­als and cou­ples.

CalEITC helps fam­i­lies make ends meet. It al­lows them the mar­gins to save for a rainy day, to buy new shoes with­out holes, to pay for child care so they can con­tinue to work. Most im­por­tantly, CalEITC in­spires hope.

Ac­cord­ing to the Cen­ter for Bud­get and Pub­lic Pol­icy, EITC ex­pan­sion in the 1990s was cred­ited with be­ing the most im­por­tant rea­son em­ploy­ment rose amongst sin­gle moth­ers. Ad­di­tion­ally, ap­prox­i­mately one-third of EITC el­i­gi­ble res­i­dents move out of el­i­gi­bil­ity an­nu­ally. How? They have hope and, like Jackie, they get a bet­ter job, they work more hours and they end up ex­ceed­ing the CalEITC in­come thresh­old, which is the way it is in­tended: a hand up, not a hand­out.

This in­come pro­gres­sion is im­por­tant to our econ­omy and the rea­son why earned in­come tax cred­its, both state and fed­eral, have his­tor­i­cally re­ceived bi­par­ti­san sup­port ever since be­ing first ad­vanced in Rea­gan’s 1986 Tax Re­form Act.

Now Cal­i­for­nia has a his­toric opportunit­y to in­vest in all of our strug­gling work­ing fam­i­lies and to turn the tide for our en­tire state. Gov. Gavin New­som is propos­ing to ex­pand the CalEITC cost of liv­ing re­fund to more house­holds, help more peo­ple and in­crease the max­i­mum el­i­gi­ble in­come to $30,000.

Earned in­come tax cred­its are de­signed to en­cour­age work and ad­dress the cri­sis we have cre­ated for work­ing fam­i­lies. Ac­cord­ing to the 2018 United Ways of Cal­i­for­nia Real Cost Mea­sure Re­port, 96% of Fresno house­holds cur­rently strug­gling to get by have at least one work­ing adult. This is not some­one else’s story. You know some­one who is strug­gling. This could be your story … or your neigh­bor’s, your brother’s, your best friend’s. Strug­gle, un­der­em­ploy­ment, cost of liv­ing in­creases — they are all real.

We have to do bet­ter. We will not rise as a city, a re­gion, a nation, with­out hope for some­thing bet­ter. We can break the cy­cles of poverty! Gov. New­som’s bold pro­posal for $1.2 bil­lion to ex­pand CalEITC is an in­vest­ment in our col­lec­tive fu­ture. And it is surely much smaller than the cost of stop-gap poverty man­age­ment we’ve been pay­ing into for decades. Let’s ad­vance to­gether. Work­ing fam­i­lies de­serve bet­ter. Please join me in sup­port­ing this pro­posal.

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