Poverty advocates, lawmakers tout state tax credit for poor

Advocates for the poor and a handful of lawmakers today stumped for a permanent state version of the federal Earned Income Tax Credit. The cost? An estimated $52 million.

At a press conference inside the Capitol, supporters said 22 other states have their own version of the federal EITC, which provides a subsidy to the poor by reducing or eliminating their federal tax bills. Colorado offers an occasional break to families who get the tax subsidy in the form of TABOR refunds that go toward a portion _ 8.5 percent _ of the federal tax credit.
But Colorado hasn't given out TABOR refunds since 2005.
Rep. John Kefalas, D-Fort Collins, was one of several lawmakers supporting a permanent state version of the tax credit that would give poor families 10 percent of what they receive from the federal credit. For example, a family that received a $3,000 benefit from the federal tax credit would get another $300 credit from the state.
"This bill is good for our economy, it helps low-income working Coloradans and it restores fairness to Colorado's tax system," Kefalas said.
Supporters said the state tax credit would cost $52 million a year, a sum that could be raised, at least for the next couple years, by relying on federal funds and unemployment compensation revenue. By 2010, the state could identify more permanent funding sources, Kefalas said.

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