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Within Our Grasp: Reducing Economic Insecurity with a State EITC Elizabeth Paulhus

Within Our Grasp: Reducing Economic Insecurity with a State EITC Elizabeth Paulhus epaulhus@wvpolicy.org Presentation at the Asset Building Summit October 29, 2010. Outline. Why do we need a state EITC? A tale of two credits Funding a state EITC with TANF dollars.

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Within Our Grasp: Reducing Economic Insecurity with a State EITC Elizabeth Paulhus

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  1. Within Our Grasp: Reducing Economic Insecurity with a State EITC Elizabeth Paulhus epaulhus@wvpolicy.org Presentation at the Asset Building Summit October 29, 2010

  2. Outline • Why do we need a state EITC? • A tale of two credits • Funding a state EITC with TANF dollars

  3. Wage stagnation and rising cost of basic needs Source. Bureau of Labor Statistics. Data from the Consumer Price Index - All Urban Consumers, South Urban region.

  4. Regressive Tax Structure • Source. Institute on Taxation and Economic Policy. (2009). Who Pays? A Distributional Analysis of the Tax System in all 50 States.

  5. Benefits of a state EITC • Significant work incentive – makes work more financially attractive option • Has helped increase employment among low-income workers • Offers crucial work support to families

  6. Credit Swap

  7. Comparing state EITC with FTC Married, Two Children

  8. Funding a state EITC using TANF • States can count the refundable portion of the state EITC as a qualified expenditure for TANF. • 16 states and D.C. currently use TANF funds to cover part of their state EITC. • West Virginia historically has had a large unobligated balance in TANF.

  9. What are unobligated funds?

  10. The History of our Unobligated Balance

  11. Final Thoughts A refundable 10 percent state EITC can play a vital role in addressing the growing economic insecurity of many West Virginia families. By using money from the TANF unobligated balance, West Virginia can fund an important investment that has benefits both today and in the future.

  12. Use of this Presentation The West Virginia Center on Budget and Policy encourages you to reproduce and distribute these slides, which were developed for use in making public presentations. If you reproduce these slides, please give appropriate credit to WVCBP. The data presented here may become outdated. For the most recent information or to sign up for our free E-Mail Updates, visit www.wvpolicy.org West Virginia Center on Budget and Policy 723 Kanawha Blvd, Suite 300 Charleston, WV 25301 (P) 304.720.8682 (F) 304.720.9696

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