Increases the amount of the earned income tax credit (Item #21) (OR -$89,000,000 GF RV See Note)
The increase in the earned income tax credit is expected to positively impact low-income families across Louisiana, potentially resulting in increased disposable income for those individuals and raising the financial stability of these households. This measure could alleviate some financial pressures and spur economic activity within local communities. However, questions about the fiscal implications for state revenue remain central to the bill's evaluation, with estimates suggesting an impact of approximately $89 million on the state's general fund.
House Bill 24 aims to significantly increase the amount of the Louisiana earned income tax credit, raising it from 3.5% to 10% of the taxpayer's federal earned income tax credit. This proposed change is applicable for taxable years starting on January 1, 2018, and seeks to provide greater financial relief for low-income taxpayers who qualify for the federal credit. By enhancing the state credit, the bill intends to promote economic support for families, thereby influencing their purchasing power and overall financial well-being.
General sentiment around HB 24 appears to be favorable among advocates for low-income family support and tax reform, who view the increase in the tax credit as a necessary adjustment to aid struggling families. Supporters argue that this change reflects a commitment to addressing economic disparities and enhancing financial assistance for those in need. Conversely, lawmakers concerned with the potential impact on state budgets and fiscal sustainability express caution, highlighting the need to balance economic support with responsible fiscal management.
Notable points of contention arise primarily around the potential fiscal repercussions of the bill. Detractors emphasize concerns regarding the loss of revenue for state services and infrastructure. Additionally, some argue about the adequacy of the current tax system in effectively targeting aid to those most in need. As discussions continue, the focus remains on how best to implement fiscal reforms that maintain support for low-income families while ensuring long-term budget stability for the state.