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The Illinois Earned Income Tax Credit

The Illinois Earned Income Tax Credit . CFED 2009 Assets & Opportunity Institute. Sean Noble. September 24, 2009. The Illinois EITC – Voices’ support. Voices for Illinois Children’s mission :

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The Illinois Earned Income Tax Credit

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  1. The Illinois Earned Income Tax Credit CFED 2009 Assets & Opportunity Institute Sean Noble September 24, 2009

  2. The Illinois EITC – Voices’ support Voices for Illinois Children’s mission: We work across all issue areas to improve the lives of children of all ages throughout our state so they grow up healthy, happy, safe, loved and well-educated. • Areas of work: • Education • Health & human services • Family economic security • State fiscal integrity

  3. The Illinois EITC – broad support Campaign of 43 member organizations, including: Public policy (i.e. Shriver Center on Poverty Law) Tax-preparation(i.e. Centers for Economic Progress) Faith-based(i.e. Protestants for the Common Good) Labor(i.e. United Food & Commercial Workers) Business(i.e. Illinois Retail Merchants Association) Many other statewide, regional, local supporters

  4. The Illinois EITC - basics • Set at 5 percent of federal EITC – making it the nation’s second-smallest • Refundable – families receive its full value • Worth $90.4 million to 848,0000 families

  5. The Illinois EITC - significance National ranking in 2006: * 9th lowest; ** 7th lowest

  6. The Illinois EITC - history • 2000 – enacted • 2003 – made permanent, refundable • 2007 – administrative kinks fixed

  7. The Illinois EITC – main messages • Make work pay – and lift families from poverty • Make taxes fairer • Boost the health of local economies

  8. The Illinois EITC – 2 advocacy tracks • Standalone legislation • Broader revenue-reform context To increase the credit’s size, advocates are pursuing:

  9. The Illinois EITC – big-picture context Voices’ “Fairness for Working Families” plan – different tools for different purposes: • Increase state EITC – targeted help for low-income families • Create a state Child Tax Credit – targeted help for families raising kids • Raise the income tax’s standard exemption – helps all, but especially low-income households

  10. $3,500 $3,000 $2,500 $2,000 $1,500 Income tax liability $1,000 $500 $0 -$500 -$1,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Earned income CURRENT tax system ONE APPROACH to fairness plan The Illinois EITC –big-picture context • One exampleof how this plan could affect the taxes of a family of four, at different income levels, assuming: • 5 % income tax rate • Doubled EITC • State child tax credit at 33% of federal CTC • Standard exemption at 115% of federal exemption

  11. The Illinois EITC – big-picture context House Bill 174 would: • Increase the personal income tax by 2 percentage points • Triple the EITC • Double the personal exemption • Double the property tax credit

  12. For more information, contact: Sean Noble Director of Government Relations www.voices4kids.org 312-516-5566 snoble@voices4kids.org

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