By: Laura Lester
May 18, 2010
On the last day of the 2010 legislative session, Georgia's General Assembly voted to eliminate the refundable portion of the Low Income Tax Credit, or LITC, which provides needed tax relief and wage support for workers earning less than $20,000 per year. This change will take nearly $22 million directly out of the pockets of more than 1 million affected taxpayers --- predominantly seniors and working families.
We strongly urge the governor to take into consideration the effect that the elimination of these refunds would have on Georgia's most impoverished residents and veto the bill. While eliminating the refundable portion of the LITC may appear to be a simple line-item adjustment, the result will increase the tax burden on those who struggle most in the current economy. This will have consequences well beyond the budget. The current recession has reduced work hours and wages for hundreds of thousands of Georgians, and the LITC helps to ease this hardship and stabilize incomes.
The federal Earned Income Tax Credit, or EITC, and similar credits like the LITC are widely recognized as tools that can help lift working families out of poverty while bringing more dollars into the Georgia economy. President Ronald Reagan called the EITC "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress." The LITC in Georgia helps low-income working families and seniors afford basic needs like food, housing, transportation, clothing and other necessities. This is even more important now, that in the current economy, the costs of these necessities is increasing.
The Atlanta Prosperity Campaign, or APC, a broad coalition of community partners initiated by the Atlanta Community Food Bank, connects low-income families and individuals to asset-building programs like the Georgia LITC and the EITC. The majority of APC clients qualify for, and receive, the state LITC. Furthermore, more than 20 percent of the 12,000 tax returns the APC helped file this tax season were for seniors who received the credit. Many of these Georgians are residing in senior communities that offer minimal resources for their basic needs. The residents most often are living on fixed incomes, relying on public transportation, and barely able to make ends meet as it is. The money from the LITC is frequently used for essential purchases like buying food or paying for medication. To give you an idea of the scarcity of resources, there are currently 20,000 seniors on waiting lists across the state for non-Medicaid home and community-based services such as Meals on Wheels. How can we in good conscience increase the burden on our parents, grandparents and great-grandparents?
While low-income tax credits promote economic stability for individual families, they also go directly to people most likely to spend them, and this is good for the local economy. What our state needs right now is a greater demand for goods and services in order to create more jobs. Money from the LITC is typically injected directly into our economy, which has a ripple effect helping pay for employees, service providers and countless other jobs.
While we recognize that the state is in desperate need of revenues, low-income taxpayers should not be targeted with a regressive tax in lieu of a solution that could be more universally applied. Smart government means connecting the dots between seemingly insignificant programs and the broad benefits that they actually provide. We expect better from those who represent all of us, because we know that in tough times it is crucial not to forget the least of us.
Laura Lester is director of advocacy and education at the Atlanta Community Food Bank.