Wednesday, June 29, 2011

Speaker Oliver Bill to Reverse Christie Tax Hike & Restore Earned Income Tax Credit Approved by Assembly Panel

(Trenton) - Legislation Assembly Speaker Sheila Y. Oliver sponsored to reverse the governor's income tax increase on working poor families was released Monday by the Assembly Budget Committee.

Gov. Chris Christie last year cut the Earned Income Tax Credit for New Jersey families, effectively raising their income tax liability by $45 million.

The bill (A-4204) would reverse that cut and restore the program to its previous level, which equates to 25 percent of the federal tax credit.

"Working people living on the economic edges don't need income tax increases," said Oliver (D-Essex/Passaic). "They need progressive tax policies like this that are considered by many to be amongst our best tools to combat poverty. The governor and Republicans may support tax cuts for millionaires and tax increases for working poor families, but that's not our priority. This Christie tax increase must go away."

The New Jersey Earned Income Tax Credit (EITC) is a credit for working poor residents who work and have earned income.

Last year, Republicans changed the EITC from 25 percent to 20 percent. This bill would reverse the change and restore the 25 percent level.

The state tax credit is based on the federal credit, considered the nation's largest and most successful anti-poverty program. Created in 1975 to ease the burden of payroll taxes for the working poor, the federal earned-income tax credit was expanded by President Reagan, and has substantially reduced child poverty and increased incentives to work. Twenty-four states created their own credits to extend tax relief for their residents, based on a percentage of the federal credit.

"The governor's tax increase hurt working poor families throughout New Jersey," Oliver said. "This change will ensure that our tax credit works the way it is supposed to work: helping low-income working individuals earn their way out of poverty and into self sufficiency."

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