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Del. Ken Plum: Helping the Working Poor

by Del. Ken Plum December 3, 2015 at 11:30 am 12 Comments

Del. Ken Plum/File photoThis is an opinion piece by Del. Ken Plum (D), who represents Reston in Virginia’s House of Delegates. It does not reflect the opinion of Reston Now.

In the season of giving, when thoughts turn to what can be done to help friends and neighbors in the community who do not make enough to make ends meet, there are many efforts to help them with a basket of food at the holidays, a food and clothes closet and other well-meaning and important giving programs.

With all the heroic efforts of volunteers, faith communities and nonprofits, such programs can be difficult to sustain and can be uneven in their level of support. They also put proud working people in a position of having to accept a hand-out. There is another solution for Virginia that can make a great deal of difference: let working people keep more of the money they earn.

Since 1975, the federal government has offered an Earned Income Tax Credit (EITC). It is one of the largest anti-poverty programs in this country. Qualifying individuals and couples who are working but with limited income as defined in tax regulations may qualify for a tax credit and if they do not use all the credit can get a refund. For specific qualifications including income limits, go to www.irs.gov/EITC.

Nationwide, almost 26.7 million persons received more than $65 billion in EITC for the 2014 taxable year. The average EITC was for $2,447. In Virginia, 612,000 persons qualified for an average credit of $2,314.

The federal EITC has been very helpful to working poor Virginians. But the program as currently administered in Virginia goes only part way to helping working people. The federal calculations of EITC are used on the Virginia income tax form and credit is given to the amount of the tax liability. There is no refund of unused credit as with the federal income tax and in many states. I proposed legislation last session and will again in 2016 to make up to 10 percent of the credit refundable.

There is a simple justification for such a change: putting more money in the pockets of hard-working families will stimulate the local economy as this money will be spent to pay for basic household and personal needs and services. It will also make the tax structure fairer for working people.

According to the Commonwealth Institute, the lowest-earning families in Virginia pay 9 percent of their income in state and local taxes while the highest earners pay 5 percent. The 2013 transportation bill included sales tax increases that disproportionately impacted low-income families since they pay a greater share of their incomes in sales taxes than do the wealthy.

Enactment of a refundable state EITC could give a tax break to 296,000 Virginians of as much as $600 for a working family to use to keep food on the table and gas in the car. I hope the Governor will include a refundable EITC in his budget proposal. Your expression of support to the Governor and to your representatives in the General Assembly could lead to the working people of Virginia contributing to growth in the economy by spending money for which they qualify and for which they have needs.

  • Jim

    Yes, I find that the Federal EITC is a low-overhead, high impact federal program. That said, I’d rather the folks in Richmond implement better funding levels for broad-based public goods, such as K-12 education and public colleges. Richmond is starving NoVa (no surprise) of education funding.

    • Chuck Morningwood

      I’m against a refundable EITC, If we’re going to do ‘giveaways’, let’s make it a separate program and not part of the tax code. I’ve done tax prep for low-income people before. It’s amazing how many of them have incomes right in the sweet spot for the maximum EITC and CTC refunds.

  • BootStrapPullerUpper

    So you’re a fan of income redistribution? Nothing like saying, “You make too much money…..”

    I have a better idea, these people can get higher paying jobs and then they’d have more money and not be poor. Hate to break it to you but a career as a burger flipper or shelf stocker is not really a career but the job of a 16 year old.

    • Chuck Morningwood

      Unless, of course, you aren’t able to do anything more. For some people, this IS their best employment opportunity.

  • Sméagol

    I think a real solution to hunger is to allow free year round hunting and fishing for poor working families. The county has plenty of deer and wild turkey, the Potomac is full of snakeheads that need to be caught, and that is a lot of sweet meat for many to enjoy. FCPS should offer students hunting and fishing lessons so graduates will be able to support themselves and possibly teach the older generation of how to survive. Perhaps the VDOT pickup truck drivers receive butcher training that would enable them to tell if road kill is still safe to eat and then carve up some steaks to donate to food banks before they take the rest to become fertilizer? These critters are eating our flowers and bushes, lets get some payback.

  • Mike M

    Thanks, Ken, for touting yet another of your special giveaway programs! It’s the only game you have. Has it occurred to you that the primary reason most of us have to NOT be among the working poor is that we weren’t or wouldn’t be comfortable there. So we hustle. We get educated; we get skills; we work hard. We don’t get too comfortable. Part of the whole social structure of our system has been to hustle and move up. It’s all part of the game. Has it occurred to you that all you are doing is eroding the system and buying votes. It’s plain to me.

  • John Higgins

    The logic of “get a better paying job” is unflawed. But, not a very realistic solution. I’m a bit puzzled by the failure to recognize that putting money in the pockets of hard working people has another side…taking it out of the pockets of other hard working people. So, what’s the better answer? Wish I had one. Maybe I’m way off base, but it seems to me that somewhere in this commonwealth (an interesting term in this context) someone could come up with something better than income redistribution. Can there not be public service projects for eligible low-wage earners that will provide extra cash, foster skill development, and afford the dignity of earning those extra bucks? We need some fresh ideas.

  • Guest

    The easy way to do this is to raise the minimum wage to a livable level. For all those who worry about re-distribution via govt., this solves that problem. If the penny pinching misers among us don’t want to pay $5 for a Big Mac because Mikey D’s has to pay a $17/hr minimum wage, that’s their choice. The bleeding heart liberals can buy two Big Macs to make sure the burger flipper continues to have a job.

    No government redistribution needed. In general, I’d agree that most state and federal credits and payments of one kind or another are gimmicks, including a variety of tax deductions (maybe even the mortgage deduction). Just make sure EVERY employee is guaranteed a livable wage and the rest will pretty much take care of itself.

    But this is Virginia where the South still lives and so does wage slavery.

    • Greg

      Establishing a minimum, or any, wage is income redistribution.

    • Trump

      Raising the minimum wage is the dumbest thing I’ve ever heard. All that will do is make companies turn to automation for no-skill jobs. Shut up and work harder.

  • Mike M

    “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”― Elmer T Peterson

    Congrats, Ken. You are an agent of decay.

  • Mary Cavanaugh

    Keeping refugees out of VA (not giving them free housing, benefits, etc.- while our Vets and “low income” citizens struggle) would be helpful!

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