Agreement over tax policies has been elusive between New Jersey’s Democratic leaders and the state’s progressives, but the two sides came together Wednesday on a subject that has enjoyed decades of bipartisan, statewide support: expanding the federal earned income tax credit, or EITC.
At his Cherry Hill office, Rep. Donald Norcross called on New Jersey’s congressional delegation to join him in sponsoring what he termed “pro-worker legislation.”
“What is this about? Leveling the playing field, encouraging people to work,” he said. “That if you work, you can make it in this country, and that’s the narrative we have to change.”
He was joined by Brandon McKoy, president of progressive think tank New Jersey Policy Perspective.
“The Earned Income Tax Credit is one of the most successful policies at helping people rise out of poverty in the history of this country,” he said.
The Working Families Tax Relief Act would increase both the EITC and the child tax credit, two tax programs designed to benefit working families. Specifically, the measure would expand eligibility to those between the ages of 19 and 68, up from its current age limits of 25 and 65. Working families with children would be eligible for an increase in their benefit of as much as 25. Those without children would see a boost, too.
The legislation would also make the full $2,000 child tax credit available to all low- and moderate-income families, while also creating a new Young Child Tax Credit for children under the age of six.
“In New Jersey, it would help 2,661,000 people,” McKoy said. “That’s including 1,137,000 children and that’s 411,800 workers without children.”
Renee Koubiadis of the Anti-Poverty Network of New Jersey says nearly 40% of residents are working poor, or living below the poverty line.
“And this boost of income really helps lift them above that poverty line to be able to meet all their basic needs and perhaps even save some money,” she said.
“’Working poor’ are two words that should never be heard together in the richest nation in the world nor one of the richest states in that nation,” she added.
The expansion of the tax credits would build on the state’s own earned income tax credit, which is based on the federal version. In his most recent budget, Gov. Phil Murphy fully funded the EITC, and the average benefit could reach up to $1,000 for the first time.
“Basically whatever you get from the federal government, you’ll get 39% in addition, on top of that from the state of New Jersey,” McKoy said.
Next year, the state rate will increase to 40%, and leaders say they’re considering expanding qualifications along the lines of the federal proposal. They also say that, with the phased-in increase to the minimum wage, the economic benefit for working families will multiply out.