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An Ohio Earned Income Tax Credit: Costs and Benefits The federal Earned Income Tax Credit provides a tax credit of up to $4204 to working families who earn less than $33,000. The credit enjoys wide bipartisan support because of its proven record in helping to reduce poverty, reward work, provide tax relief, stimulate the economy and meet basic expenses for working families. The federal EITC lifted 4.8 million people above the federally defined poverty line in 2001, more than any other government program.
Seventeen states offer their own EITCs based on the federal credit. An Ohio EITC, set at 20 percent of the federal benefit amount, would provide an estimated 676,466 working families in Ohio with an average annual credit of $328 for an estimated total cost to the state of $222 million dollars for the Tax Year 2004. This is less than one percent of Ohio's projected General Revenue Fund expenditures for Fiscal Year 2004. As Ohio debates changes to its tax system, many of which would fall heavily on low- and middle-income families, this report outlines how incorporating a state EITC into the changes could provide relief to low- and moderate-income working families.
Every Ohio county has working families who claimed the federal EITC in 2000 and would qualify for a state EITC. In the average Ohio county, 12 percent of taxpayers filed for the federal credit.
To see how your county would be affected,
click here.
For an executive summary, click here.
For the
full report, click here.
Click here
to go to our main EITC page, with links to
our other reports, a description of our work with the Cuyahoga Earned Income
Tax Credit Coalition, and other resources.
Policy Matters' research on
tax fairness is supported by a generous grant from the Cleveland Foundation.
The photographs displayed
above can be found on
www.gundfdn.org
Cleveland Plain Dealer, Hanauer, April 14, 04
In Ohio, The Poor Are Getting Poorer Columbus Dispatch, Honeck, April 12, 03
Ohio Can Raise Money And Be Fair Akron Beacon Journal, Hanauer, April 10, 03
Cleveland Scene, April 9, 03
Policy Matters Urges Creation of State Earned Income Credit
Hannah Report, March 24,
03
The Ohio Tax Formula: Make MORE, Pay
LESS
Cleveland Plain Dealer,
Schiller, January 15, 03
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