Presented before the Senate Revenue and Taxation Committee of the Utah Legislature by Stan Rasmussen, Sutherland Institute vice president.
Thank you, Mr. Chair, and good morning, Senators. Stan Rasmussen with Sutherland Institute.
Supplementing information we emailed to you yesterday, Sutherland supports the proposed Earned Income Tax Credit as detailed in HB 57 because it helps people who are ready and able to help themselves escape intergenerational poverty through work, by offering them the fullest possible reward of dignity and income from full-time employment. Many people currently in intergenerational poverty – especially those with children – have a myriad of personal, cultural, and educational barriers that must be overcome before stable, full-time employment is a realistically sustainable option for them. However, even after those issues have been resolved, they still face a daunting transition to a life of self-reliance and full-time employment, for which their family and life experience generally has not prepared them.
In such circumstances, it is both sound economic policy and prudent welfare policy to lower tax barriers that can otherwise eliminate some of the financial and human rewards that earned success brings. This is what HB 57 does. By lowering tax barriers to the exit of intergenerational poverty on the back end, we encourage that exit for people ready to take the leap of faith out of poverty and into self-reliance.
Additionally, by being targeted to those in intergenerational poverty, this bill eliminates many of the legitimate concerns about abuse and waste that can accompany an earned income tax credit policy. So, this legislation is good for those in poverty, good for the economy and good for taxpayers as well.
For these reasons, we encourage you to support HB 57.