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Analysis of the Bush Budget
President Bush released his budget for Federal Fiscal Year 2009 on Monday. According to an analysis by the Center on Budget and Policy Priorities (CBPP), the Administration's proposed budget for Federal Fiscal Year 2009 would cut funding for domestic discretionary programs outside of homeland security -- the part of the budget that funds everything from education to environmental protection to veterans' health care and Head Start -- by $2.4 billion in nominal terms (i.e., before adjusting for inflation) -- and by about $15 billion or 4 percent after adjusting for inflation.
PA House Earned Income Tax Credit Bill Turns into Tax Cut Frenzy
Combined Cost of "Christmas Tree" Full of Tax Cuts Rises to Estimated $3.8 billion
On Wednesday, January 16, the Pennsylvania House of Representatives took up legislation sponsored by Representative Dwight Evans to establish a refundable state earned income credit (EIC). Set at 15% of the federal EIC in the first year and 30% in year two and beyond, the bill would provide targeted tax relief to working families with annual incomes up to $35,000. The House Appropriations Committee estimates the legislation would cost $25 million in year one and $250 million in year two.
PBPC Details Cost Estimates of Amendments to House Bill 377
On January 17, 2008, the Pennsylvania House passed a variety of admendments to House Bill 377 which will have a significant impact on state government revenues over the next few years. PBPC has produced a table detailing the costs associated with the various amendments that can be downloaded in PDF format.
Earned Income Credit Again Advances in PA Leglislature
A bill to establish a Pennsylvania Earned Income Credit (EIC) is scheduled for a vote in the Pennsylvania House the week of January 14th. House Bill 377 (sponsored by Rep. Dwight Evans) would create a state EIC set at 15% of the federal Earned Income Tax Credit beginning in Tax Year 2008 and 30% of the federal credit beginning in Tax Year 2009 and beyond. Working families with children would be eligible for the credit, which is an alternative to the state's current Tax Forgiveness program.
A state EIC would make the state's tax system more fair, and would return almost $1000 to a single parent family earning $12,000 a year, and $900 to a family of four earning $15,000 a year, in addition to tax forgiveness. This income would help to offset other taxes and provide much needed resources to the Commonwealth's poorest working families.
More than 15 amendments have been added to the bill and will be debated on the floor. Proposed amendments would eliminate the state inheritance tax, reduce the state personal income tax rate, repeal the telephone gross receipts tax and reduce business tax liabilities. Each of these amendments would add substantially to the cost of the legislation and provide little or no benefit to low-income working families. PBPC released a revised analysis of the EIC bill on January 16th.
How Would a 30% PA Earned Income Credit Help Low-Income Families?
PBPC has calculated how low-income families would be helped by the 30% Earned Income Credit (EIC) that would be created by House Bill 377 by PA House district.
Visit the PBPC website for analysis of the Governor's 2008 budget and its impact on critical services, legislative reaction, and subsequent developments.
