State Senator George Young of Oklahoma City files measure to reinstate ‘Earned Income’ Credit
Published: January 8th, 2021
Sen. George Young, D-Oklahoma City, has filed a measure aimed to reinstate the refundability of the state earned income tax credit (EITC). A press release sent to CapitolBeatOK.com, The City Sentinel and other news organizations said the EITC “serves as an essential tax benefit for working families across Oklahoma.”
Senate Bill 220 would restore the state EITC credit to 5 percent, meaning if the amount families receive from the EITC is more than the amount of state income tax they owe, they would collect the difference as a refund.
“The earned income tax credit is designed to encourage work and decrease poverty in our communities,” Young said.
“Reinstating the refundability of this tax credit is an easy way we can help Oklahomans take care of their families, especially during a time where our low-income workers have often been hit hardest by the COVID-19 pandemic. In addition, studies show this tax credit stimulates local economies, so it would give a boost to our small businesses that are also struggling during this time.”
Oklahoma is one of 30 states with an EITC, but it is currently non-refundable. Twenty-three of the 30 states offer a refundable EITC.
“We don’t know how long the economic impacts of the COVID-19 pandemic will last, but we do know that the earned income tax credit gets dollars into the pockets of hard-working Oklahomans to pay for the essentials like gas, groceries and rent,” Young said. “This is an easy way to help those who need it most, and I urge my fellow colleagues to quickly pass this legislation once we convene in February.”
The EITC has many critics who contend that contrary to intentions, in some versions it can reduce work incentives and is far more expensive than its public sector and private family benefits merit.
The historic roots of the idea can be traced to the “negative income tax” and similar ideas advanced decades ago by, among others, President Richard Nixon, economist Milton Friedman and William F. Buckley, Jr.
Note: Pat McGuigan contributed to this report.