Preserve the Credit Workers Have Earned

February 25, 2013By Chuck Sheketoff

They’ve earned it.

Working families with low incomes have earned the Earned Income Tax Credit, and the Oregon legislature should act quickly to make sure they keep it.

Many Oregonians toil in jobs that pay too little, so they struggle to make ends meet.

That’s not right. Oregonians believe that families who work and play by the rules should be able to provide for their children and get out of poverty. That’s why the Oregon Earned Income Tax Credit exists.

Related materials:

Oregon Earned Income Tax Credit resources page

Learn about Oregonians for Working Families, a statewide coalition advocating for renewal and strengthening of the state EITC

The Oregon Earned Income Tax Credit complements the federal Earned Income Tax Credit. The federal credit is the single most effective anti-poverty program for working families with children. In 2010, the federal Earned Income Tax Credit lifted about 6.3 million people across the country out of poverty, including about 3.3 million children.

The Oregon credit works with the federal credit to open the door to economic opportunity for families who work and have modest incomes.

Who are these families? Picture a family of a returning veteran, a single mother supporting two children or two young parents working part-time while they go to college. The families helped by the Oregon Earned Income Tax Credit are as varied as our communities.

In all, the Oregon Earned Income Tax Credit helps about a quarter-million working families — about one out of every seven families in the state — make ends meet.

Oregon’s Earned Income Tax Credit is currently scheduled to expire at the end of 2013. If lawmakers do not renew it, those quarter-million low-income working families will have less net income. A two-parent family of four earning poverty wages, for example, would see its net income fall by about $300 due to the additional taxes.

Many of Oregon’s working families saw their wages or hours cut back or lost a wage earner during the recession. Many are still struggling. To ensure that working families who’ve earned the Earned Income Tax Credit receive it, lawmakers should, at a minimum, extend the expiration date of the current credit.

But lawmakers should go beyond just renewing the Earned Income Tax Credit; they should heed Governor Kitzhaber’s call to increase it. Governor Kitzhaber's proposed modest increase would enhance the ability of Oregon’s Earned Income Tax Credit to reduce poverty for working families and their children. Over 700,000 Oregonians would immediately benefit from more net income from the work their families do.

Lawmakers can and should make renewal and improvement a priority and move swiftly to protect the working families who rely on the credit. There’s widespread support for renewing and strengthening the credit, and no organization has publicly voiced opposition.

Delay only risks putting low-income families in harm’s way. In 2013, the legislature’s joint tax credit committee will have a limited amount of money to spend. Other tax credits, some backed by corporate and wealthy interests, will vie for funding. The longer the legislature waits to renew and strengthen the Oregon Earned Income Tax Credit, the greater the risk that working families will come up short and lose out on what they've earned.

The Oregon Earned Income Tax credit is a small investment that can make a large difference in the lives of working families. These families have earned the credit through work. Lawmakers should renew and strengthen the credit now, not later.

Chuck Sheketoff is executive director of the Oregon Center for Public Policy