Gov. Pat Quinn: Doubling of Earned Income Tax Credit relief is good policy
BY GOV. PAT QUINN January 14, 2012 1:50AM
Updated: February 16, 2012 8:20AM
Rhonda Jones knows what it’s like to live paycheck to paycheck. At times in her life, the 43-year-old single mother of five worked three jobs to make ends meet. Now a high school counselor, Ms. Jones says that the tax relief available to working families often proved to be her saving grace.
“I was always behind or short on something, but I could always get caught up when I got that check in the mail,” Ms. Jones said.
That check is the Earned Income Tax Credit (EITC), a complicated name for tax relief for working families. Congress enacted a federal EITC in 1975, and Illinois enacted a state version in 2000. Last Tuesday, I signed a bill to put more money in the pockets of working families by doubling Illinois’ EITC from 5 percent of the federal credit to 10 percent, saving low-income workers an extra $105 million a year. As the largest improvement of Illinois’ EITC since its inception, this tax relief will save more than 900,000 families an extra $100 to $200 a year.
This is good policy for families and for economic growth. That’s because while EITC provides much-needed relief for low-income workers, it also boosts local economies by increasing consumer demand. A 2006 Brookings Institution study found that every dollar a family saves through EITC translates into $1.58 of local economic activity. More money in families’ pockets often means more money spent in neighborhood stores and the community.
Ms. Jones, for example, used the extra cash to pay off her bills, fix the car, purchase coats and hats for her family, and buy gas to drive her five children to cheerleading, football and basketball practices.
“For so many years, when tax time came around, EITC was the only return I got back,” Ms. Jones said. “It was money to spend that I didn’t have before.”
Up until last week, Illinois had one of the lowest EITC’s in the country and that needed to change. When I insisted that tax relief for working families be part of the economic growth and tax reform agenda, it was because of mothers like Rhonda Jones. Ms. Jones serves as a volunteer at the Center for Economic Progress, where she helps workers prepare their taxes. Three of her five children are now the first in her family to attend college, while two prepare to graduate from high school. Ms. Jones and other everyday working people are the heart and soul of Illinois.
I commend those who voted for this important bill and sponsors Sen. Toi Hutchinson (D-Olympia Fields) and House Majority Leader Rep. Barbara Flynn Currie (D-Chicago).
We must all strengthen our commitment to making the tax code fairer for working people. The tax system should not be rigged in a way that leaves anyone working 40 hours a week, 52 weeks a year, living in poverty.
As we celebrate the legacy of Rev. Dr. Martin Luther King Jr., we should remember that throughout his life, Dr. King preached a lot about alleviating poverty. Illinois made progress last week. Let’s keep it up.
Pat Quinn is the governor of Illinois.