Tuesday, April 14, 2009

Tax talk of how to protect low-income workers

By Jamey Dunn

As the deadline for filing income taxes nears, Illinois groups urge protection of low-income workers if the General Assembly approves a state income tax increase for next year.

The advocacy groups of Voices for Illinois Children, the Sargent Shriver National Center on Poverty Law, Protestants for the Common Good, the Center for Economic Progress and the Center for Tax and Budget Accountability joined in the state Capitol today to call for an increase in the state’s earned income tax credit.

While an increase in the credit has been proposed many times in the Illinois General Assembly, advocates are looking for a sympathetic ear in the current administration. Jerry Stermer, Gov. Pat Quinn’s chief of staff, was founder and president of Voices for Illinois Children before moving on to his current position.

The group want lawmakers to raise the amount of the state earned income tax credit so that the maximum per household would increase from $240 to about $1,000. The credit reduces the amount of income tax owed but can also result in a refund, according to the Internal Revenue Service. This year, a family of two parents and two children would have to earn less than $42,000 to qualify for the credit. According to Mary Ruth from the Center for Economic Progress, the average credit the state gives out is between $80 and $100.

Sean Noble, spokesman for Voices for Illinois Children, said that the tax credit would target lower-income families more effectively than Quinn’s proposed increase in the personal tax exemption, which he wants to raise from $2,000 to $6,000.

Noble added that an increase in the earned income tax credit might find more legislative support because it would cost less. He estimated that the earned income tax credit proposal would cost an additional $350 million a year. Quinn’s personal exemption increase would cost between $1 billion and $2 billion.

The advocates could compromise, Nobel said, if Illinois were to increase the earned income tax credit and the personal exemption.

Gaylord Gieseke, former vice president of Voices for Illinois Children, is serving as interim president until a replacement for Stermer is found. The organization is conducting a nationwide search.

Check back tomorrow for coverage of the “Tax Day Tea Party,” a protest of government spending and tax increases. It’s scheduled to take place at the Capitol at noon.

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