A State EITC Helps Missouri’s Working Families

The following post was originally published in the St. Louis Post-Dispatch.

Think of the mom who has to make a decision every week of whether to feed her two children or pay her bus fare to get to her job miles away. Think of the dad who must decide between paying for a critical repair to his family’s car or paying the heating bill during the cold month of January. Think of the young person who is barely able to pay their rent each month, but who dreams of going to college. These are the questions many families face on a regular basis. I grew up in a household facing these difficult decisions and understand how it can foster feelings of helplessness about the possibility of transcending poverty.

The financial stability of individuals and families contributes to a strong, stable community. For decades, United Way has championed programs and initiatives to help people increase income, build savings, grow assets and reduce debt. United Way of Greater St. Louis supports the establishment of a Missouri Earned Income Tax Credit (EITC). Modeled on the successful federal program established in 1975, a Missouri EITC would provide targeted assistance to more than 500,000 low- and modest-income families in Missouri, including veterans, military families and single working parents. There are three key benefits United Way cites in its support of a Missouri EITC: it encourages work, boosts our economy and reduces poverty.

Only those with a job and income are eligible to receive an EITC refund, therefore it incentivizes more people to find and hold a job. In addition, a state EITC is designed to encourage Missouri’s lowest-wage workers to increase their hours and earnings, giving them more on-the-job experience and training. When people have full-time work experience, they often have better job opportunities and higher earnings over time. For the St. Louis region, this translates to a more robust and skilled workforce, and more money in the pockets of our workers to provide for their families.

Our state and local economy will also benefit from the establishment of a state EITC. The greater our workforce, the stronger our economy. The majority of families who claim an EITC refund use it on priorities like basic needs, housing, utilities, transportation and education. This represents money spent locally, additional investments and a boost to the economy.

Finally, a Missouri EITC would help reduce and lift thousands of families out of poverty. During the 2015 tax year, the federal EITC lifted 6.5 million people nationwide, including 3 million children, out of poverty. The U.S. Bureau of Labor Statistics ranked Missouri 30th of all states in relation to lowest poverty levels; 15.5 percent of the state’s population lives in poverty. If we believe that we can help families and children move out of poverty through a Missouri EITC, we must make this a priority.

Establishing a state EITC is one step in fighting to break the cycle of poverty and create better opportunities for all children in the St. Louis region. Supporting the Missouri EITC is good for families, children and Missouri.

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