HARRISBURG, PA – An alliance of leaders from the business, labor, children’s advocacy groups along with United Way joined their voices today calling for the creation of a refundable tax credit in Pennsylvania that could benefit as many as 874,000 households.
Supporters, during a press conference at the state Capitol, said the Pennsylvania earned income tax credit would offer working taxpayers financial help and stimulate the economy at a time when that is most needed because of rising inflation and continuing pandemic impact. Those speaking out for working families who would benefit from the tax credit were the National Federation of Independent Businesses (NFIB Pennsylvania), United Way of Pennsylvania, the PA AFL-CIO, and Pennsylvania Partnerships for Children.
The group is calling on Pennsylvania to join 30 other states in offering individual working taxpayers tax relief in the form of a refundable earned income tax credit. Legislation to create the tax credit is sponsored by Sen. Mario Scavello and Rep. Martina White. The coalition said lawmakers should make the tax credit part of the 2022 state budget.
“This tax credit is a win-win for the state,” said Kristen Rotz, president of United Way of Pennsylvania. “Our economic impact study, released earlier this year, shows that for every $1 in cost to the state budget, a refundable tax credit will generate a return of $4 in economic growth and $3 in savings for social spending.”
Melissa Morgan, assistant state director of NFIB Pennsylvania, said the tax credit will help add more people to the workforce and increase work hours, which are good for small businesses throughout the state.
“When families receive more of their earnings back, they will re-invest it in the economy through purchasing goods and services from small business. This will help small businesses and local economies recover from the pandemic,” said Morgan.
Dave Madsen, community services and education director of the PA AFL-CIO, said the results from the United Way study make it clear why this is a nonpartisan issue and should be supported by everyone. He noted that a 10 percent state tax credit will generate annual benefits of at least $562 million to the state economy and a 25 percent tax credit will mean a $366 million benefit.
“People are working two and three jobs today and still not earning enough to pay all of their bills,” said Madsen. “This is a way to put $200 to $600 back into workers’ pockets.”
Lawmakers should consider how much this can benefit children in 2022, said Kari King, president, and CEO of Pennsylvania Partnerships for Children. She added that when families have more income, children have better outcomes.
The refundable tax credit would help reduce child poverty and the number of low birthweight babies, fight child maltreatment and boost access to health insurance coverage among children, she said. The tax credit would also help address income inequality that contributes to higher poverty rates for Black and Hispanic families.
“There is a reason so many states have focused on a refundable tax credit,” said King. “They know this has enormous positive benefits for children and families.”
Read more from the Pennsylvania State EITC: A Benefit-Cost Analysis.
About United Way of Pennsylvania (UWP)
United Way of Pennsylvania is a 501(c)(3) organization with a mission to champion United Way as a leader and partner in building more financially resilient families and thriving communities throughout Pennsylvania. United Way of Pennsylvania envisions an inclusive, impactful and collaborative network of United Ways working with business, community, faith, and government leaders to advance equitable access to health, education, and financial stability for all Pennsylvanians.
UWP is committed to raising charitable dollars that are invested in community impact work which addresses needs specific to the local community. In many cases, these funds support public-private partnerships that further leverage state taxpayer dollars. United Way also commits to advocate for policy change which will help more Pennsylvania families and communities achieve the basic building blocks of a good quality of life in Pennsylvania. UWP is a membership organization which serves as the voice for 43 member United Ways and 2 United Funds across the Commonwealth.