A Senate committee is considering a SB 105 proposal to create a state version of the federal Earned Income Tax Credit, which would provide funds for low income Missouri workers.
Senator Jolie Justus (D-Kansas City) sponsors the EITC idea, which has been in existence at the federal level since 1975. To qualify for the program, a recipient must work for a refundable credit at 20 percent of the federal EITC. Justus acknowledges this idea comes with a huge price tag – a fiscal note of $171-million, but she is interested in working with other Senators to bring down that number.
During the hearing, Senator Chuck Purgason (R-Caulfield) expressed concerns that this is little more than redistribution of wealth.
“You’re basically taxing people at a rate,” asked Purgason. “And redistributing it back to people that don’t pay taxes, is that correct?”
He was assured, by Justus, that recipients must work and do pay taxes.
Purgason then narrowed his question: “They would apply for taxes, but they would actually receive back from the state more than they paid in.”
Justus responded, “That could happen. Yes.”
The hearing ended with the panel taking no vote on the legislation.
Download/Listen: Steve Walsh report (:60 MP3)
