Rubalcava: Credit for low-income families
By kate rubalcava
In modern times, Labor Day is loosely translated as a holiday marking the end of the summer where families often squeeze in one last weekend of camping before the leaves change and temperatures cool.
In a historical context, Labor Day is an annual tribute to workers recognizing their contributions to the nation's strength, prosperity and well-being.
In honor of Labor Day both historical and modern we, as a state, should acknowledge the contributions we are all making to our state's thriving economy and ask ourselves what each of us is doing to ensure the success of our neighbors and future sustainability of our communities.
In Utah, 1.3 million adults are working. Despite this high rate of employment, 7 percent of working families are unable to escape poverty. These families are playing by the rules, working hard every day but still unable to feed their families a healthy dinner, buy books and supplies for school, or purchase a backpack for their kids.
One policy has done more to help low-income working families than any other program, the federal Earned Income Tax Credit. Nearly 1 in 5 Utah taxpayers receive the federal EITC. In 2013, over 19,000 Utahns had their taxes prepared, by over 800 volunteers, through the Volunteer Income Tax Assistance program. VITA is a service where low- to moderate-income individuals can have their taxes filed for free, saving them, on average, $211 in preparation fees.
The average tax return for those working families was $1,800, money they used to provide for their families. Nearly 35 percent of VITA clients used their tax returns to purchase food, pay utility bills and their rent, and 17 percent placed a share of their return into a savings account.
The state of Utah can do even more to ensure these taxpayers are able to maintain self-sufficiency by joining 25 states and the District of Columbia by adopting the Working Families Credit. The credit would allow low- and moderate-income taxpayers to retain a greater share of their earnings by providing a $112 credit on their tax return an additional sum of money for families to maintain or achieve self-sufficiency.
It can go toward emergencies or to pay off high-interest debt. It can pay car insurance or license a vehicle. It can keep the Internet and phone connection working, which makes searching for higher-paying jobs and completing online training programs possible.
On this Labor Day, ask yourself what your family could do with an additional $112. Would your child like to begin a new hobby? Perhaps you're eager to begin saving for higher education costs or looking forward to paying off your own student loans?
Instituting a Working Families Credit for families who need it the most is the right thing to do. It's a decision that would positively impact the Utah economy, Utah families and the lives of workers striving to achieve the American Dream.
Kate Rubalcava is program director for Community Action Partnership of Utah's Earn it. Keep it. Save it.