Increases the amount of the earned income tax credit (Item #21) (OR -$47,000,000 GF RV See Note)
Impact
If enacted, this increase in the earned income tax credit would significantly impact state tax law by providing a more substantial relief mechanism for low-income individuals and families. This change is expected to help offset living expenses and encourage a higher level of financial independence, as the EITC is designed to support those who are employed but still require assistance to meet their financial needs. Moreover, the bill's provisions state that the adjustment will take effect for tax years beginning on or after January 1, 2018, which may affect state revenue projections.
Summary
House Bill 6 aims to amend Louisiana's earned income tax credit (EITC) by increasing the state-level credit from 3.5% to 7% of the federal earned income tax credit. This change is intended to provide additional financial support to low-income working families in Louisiana, thereby enhancing their economic stability. The increase in the EITC is in alignment with efforts to alleviate poverty and incentivize work among residents in the state, reflecting a growing recognition of the importance of financial assistance for working families.
Sentiment
The sentiment surrounding HB 6 appears to be largely positive among legislators who advocate for increased support for low-income families. Proponents view the increase in the tax credit as a practical means of providing economic relief and enhancing the financial landscape for vulnerable populations in Louisiana. Conversely, opposition may arise from those concerned about the potential fiscal implications and the impact on the state budget, especially given that tax credits can lead to reduced state revenue in the short term.
Contention
Notable points of contention regarding HB 6 could revolve around the long-term impacts on state finances and the prioritization of tax aids versus broader economic initiatives. Critics may argue that while the increase in the EITC is beneficial, it could lead to budgetary constraints that might limit funding for other essential state services. Despite these concerns, supporters maintain that the increase is a necessary investment in the future of Louisiana's families and workforce.