Your Resources for Understanding the Debate Around Creating a State EITC in California

Yesterday was “Tax Day” — a day that millions of low- and moderate-income Californians look forward to because it means they’ll receive sizeable tax refunds thanks to the federal Earned Income Tax Credit (EITC), a refundable personal income tax credit that helps foster economic security among working families and individuals. Low-income families with two children can receive as much as $5,460 from the credit, a significant sum that can help families pay their bills, reduce their debt, or cover the cost of major necessary expenses, such as replacing or repairing a car.

As we explain in our recent report, establishing a state EITC in California would build on the federal credit, which has a proven track record for encouraging work and reducing poverty. State policymakers have introduced a few different bills that would create an EITC: Assembly Bill 43 (Stone, et al.), Senate Bill 38 (Liu), and Senate Bill 8 (Hertzberg). To help inform the debate over how best to design a state credit, we’ve compiled a number of resources:

  • For additional perspectives on why California should create a state EITC, see this recent San Jose Mercury News op-ed by Carole Leigh Hutton, president and CEO of United Way Silicon Valley (the United Ways of California is sponsoring AB 43) and this recent editorial from the Los Angeles Times.

Momentum for creating a state EITC in California is building, and as the debate over how best to design a credit for California continues, watch for additional Budget Center commentary and analysis on this important issue.

— Alissa Anderson