General Assembly inaction leaves low-income workers behind
April 12, 1016
The Maryland General Assembly has missed an opportunity to give a much-deserved break to people who work but struggle to get by on low wages. Despite bipartisan support, lawmakers failed to pass a bill strengthening the state’s Earned Income Tax Credit by the end of the legislative session Monday.
“Despite broad agreement, we are greatly disappointed that the General Assembly couldn’t pass the Earned Income Tax Credit expansion, which would put money back in the pockets of 240,000 low-income workers,” said Robin McKinney, Director of the Maryland CASH Campaign. “We hope that leadership moves swiftly to move this legislation forward as soon as possible.”
“Because the legislature failed to act, nearly 240,000 low-wage workers will continue to be taxed deeper into poverty because the current EITC does little or nothing to help them,” said Benjamin Orr, Executive Director of the Maryland Center on Economic Policy.
The proposed changes to the state’s Earned Income Tax Credit would have helped people who don’t claim dependents on their taxes or are too young to qualify, providing an average credit of about $350. This would have particularly helped young people who have recently entered the workforce, as those between ages 18 and 24 don’t currently qualify for the credit.
Money invested in the EITC also would have boosted the state’s economy. Research shows that people with very low incomes are much more likely to spend the extra money from a tax refund locally, on things they need but couldn’t otherwise afford, like childcare and car repairs.
Although it was on a path to passing on its own merits, the legislation failed after the Senate combined it with other tax cut proposals that would have given an even larger tax break to people who need it the least, costing the state $537 million over the next five years. The House of Delegates was advancing a different tax package that focused income tax cuts on middle-income earners instead and the chambers could not reach agreement.
“Throughout the course of this legislative session, lawmakers gained a greater understanding of how many hard-working people who are struggling to make ends meet are left behind by the current Earned Income Tax Credit,” Orr said. “The General Assembly should revisit this issue as a stand-alone proposal and allow these low-wage workers to keep more of what they earn.”
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Media Contact: Kali Schumitz, 410-412-9105 ext. 701, kschumitz@mdeconomy.org
Maryland Center on Economic Policy is a nonprofit, nonpartisan organization that advances innovative policy ideas to foster broad prosperity and help our state be the standard-bearer for responsible public policy. Learn more at mdeconomy.org.
The Maryland CASH (Creating Assets, Savings and Hope) Campaign is a statewide network of organizations that promotes programs, products and policies that increase the financial security of low-to moderate-income individuals and families across Maryland. Maryland CASH advocates on behalf of these families, as well as provides financial education programs such as the Maryland CASH Academy at http://www.mdcashacademy.org/. Their partner organizations provide free tax preparation sites offering access to appropriate financial services and benefits screening. For more information, contact Ms. Robin McKinney, Director of the Maryland CASH Campaign, at robin@mdcash.org or 410-929-4190. www.mdcash.org @Maryland_CASH @MDCASHAcademy
