Editorial was off-base
The paper’s editorial April 28 was poorly written. Comparing Peter Shumlin with Mitt Romney sounded like it was written by a little kid with a grudge and was way off point. In a word, it was a little “tacky.” This is the same governor the paper recently lauded after the state of the State speech for being so good and progressive. It was obvious that you do not understand how the earned income credit works and affects taxes. The scary part to me is it seems our legislators also do not understand tax economics.
To clarify two recent points made in the paper. A reduction (or even an elimination) of the earned income credit does not increase anyone’s tax. In Sunday’s paper an editorial by Carlen Finn stated that the earned income credit allows taxpayers to keep more of their hard earned money. No it does not.
The earned income credit is, by my definition, a pure entitlement tax policy. Taxpayers can have little and in many cases no tax liability and still collect a substantial refund. It is not really a refund because the money was never paid in. It is not “keeping more of their hard earned money” it is taking other people’s money. It is also a great policy which I fully endorse. It cost the federal government $62 billion last year and it is worth every penny.
However, when it comes to the state paying earned income credits there is a difference. The governor was right in bringing up looking at our policies regarding earned income credits. Compare Vermont, for instance, to our neighbors to the south. Massachusetts pays 15 percent of the federal credit, a nice progressive and generous credit. Vermont pays 24 percent of the federal credit. So, if any of our legislators can tell me where that number came from, I’ll buy you a beer. I’d be happy to explain where it came from and explain why it might be a good thing to look at.
Also note, Massachusetts does not have an income sensitive property tax that refunds hundreds of millions of dollars. A couple of hundred million in credits plus another 25 million and pretty soon you’re talking some real money.
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