Louisiana House Bill HB61

Louisiana 2016 2nd Special Session

• Introduced: 6/8/16
• Refer: 6/8/16

Caption

Provides relative to the earned income tax credit (Item #47) (OR -$47,000,000 GF RV See Note)

Impact

The proposed increase in the earned income tax credit could have significant implications on state laws concerning tax policies and low-income support. By augmenting the credit, the bill aligns state tax benefits more closely with federal provisions, thus providing greater support to low-income earners. This enhancement is likely to improve the financial situations of eligible individuals and stimulate local economies by increasing disposable income in low-income households.

Summary

House Bill 61 proposes an increase in the individual income tax credit tied to the federal earned income tax credit from 3.5% to 7%. This adjustment is aimed particularly at benefiting low-income individuals and families, potentially offering more financial relief to those who qualify. The increase is expected to apply to taxable years beginning on January 1, 2016, enhancing the overall benefit for state taxpayers who are already eligible for the federal credit.

Sentiment

The sentiment surrounding HB 61 appears to be positive, predominantly from advocacy groups and members supporting social equity and economic relief measures. Proponents believe that increased tax credits will alleviate some of the financial burdens on low-income families, thereby promoting social welfare. However, there may be concerns from fiscal conservatives regarding the impact on state finances and budget considerations in light of the estimated cost associated with the increased credit.

Contention

While the bill enjoys support for its potential benefits, contention may arise over its fiscal ramifications, specifically its estimated budgetary impact, which has been highlighted as a $47 million reduction in the general fund. Legislators opposed to the measure may argue that such a decrease in revenue could affect funding for other essential services and programs. The debate will also likely center on the broader implications for the state's financial health and priorities in addressing poverty and economic support.