"Maine Rejects Tax Cuts For The Rich, Approves A Break For The Poor"
Bucking the national trend of asking the poor to pay more in taxes while giving breaks to the wealthiest Americans, Maine’s House of Representatives this week approved an expansion of the Earned Income Tax Credit and rejected an attempt to cut capital gains taxes.
A handful of states have done the opposite recently. Arkansas, Ohio, Louisiana, Nebraska, Wisconsin, Kansas, Oklahoma, and North Carolina‘s legislatures have all backed efforts to lower taxes on the rich. But Maine’s legislature is looking to give more money to those who need it most instead of the rich:
Portland Democrat Rep. Peter Stuckey’s bill, LD 455, An Act to Increase the State Earned Income Credit, would double the state earned income tax credit for low-income individuals and families to 10 percent of the federal earned income tax credit and make it fully refundable at the state level.
Democrats said the bill would provide financial relief to those who need it most, people who are likely to spend the money locally on necessities such as rent and groceries.
“We heard over and over again that the people who are going to get this credit are going to buy groceries, gas for their cars, and pay their rent,” said Rep. Adam Goode, D-Bangor, who co-chairs the Legislature’s Taxation Committee. “These are people we are sure are going to spend the money right away.”
Those who backed the capital gains tax cut in Maine, the same people who oppose the EITC expansion, incorrectly believe that a capital gains cut will help boost the economy. In actuality, the Congressional Research Service has found no correlation between economic growth and lower capital gains taxes.
On the other hand, the federal version of the EITC helps boost both employment and education among the poor. In 2011, 4.9 million children, and 9.4 million people overall, were lifted out of poverty thanks to the federal EITC.