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- What does shifting funds from Earned Income Credit to a child care subsidy accomplish?
Governor Shumlin proposes cutting the Earned Income Tax Credit
for the working poor in order to shift funds to the state's child
care subsidy for the working poor. He justifies this transfer as a
means of helping the working poor, but the people who will receive
less under the EITC are also working poor.
In his recent budget address, the Governor used the example of
families making $40,000 per year. Under the current child care
subsidy rules, they get a child care subsidy of 10% of the child
care costs. The governor noted that, "Those same families
under our proposal will have up to 50 cents of every dollar of
their childcare expenses paid by the State."
That's great for the family making $40,000 which has one or more
children. What about the working poor who are eligible for EITC but
have no need for child care? What about the working poor who are
eligible for EITC and are so poor that they already get a 100%
child care subsidy?
It looks to me like the governor's plan helps some working poor
people while hurting other working poor people, and I have no idea
how such a plan solves anything. What is the overall effect
- who gets helped and who gets hurt, and to what extent are
they either helped or hurt? The legislature needs to answer those
questions before even considering the Governor's proposal.
Lodiza LePore, Bennington, Vt