Senate President Pro Tem Martin M. Looney (D-New Haven) has proposed an expansion of the earned income tax credit (EITC). This is a refundable credit that provides cash to eligible taxpayers instead of reducing a tax burden. It expands upon the 2011 version created by Gov. Dannel P. Malloy.
According to a CT Mirror article by Keith M. Phaneuf and Mark Pazniokas: One thing Lamont and Looney can agree on: Help for the working poor, Aug. 20, 2021, “Governor Lamont is a proponent of the solution, but this is no surprise as he and the Democrat party are facing reelection next year and want a solid, if limited, record on key progressive labor issues.”
When have we heard about the EITC before? It’s a spin on economist Milton Friedman’s 1968 manifesto, known as the Negative Income Tax. How the prognosis is received depends on who has the best bedside manner to deliver the proposed treatment of the issue. Senator Looney’s current proposal is just a cookbook with a different cover—not a proprietary recipe.
Both approaches address the fiscal challenges of the working poor and now the frosting on the cake is the current minimum wage movement.
To qualify for the state credit, a filer must be eligible to receive the federal EITC. According to the IRS, examples of current income eligibility limits for the federal EITC include $53,330 for a couple with two children, $41,756 for a single parent with one child, and $15,820 for a single person with no children.
It’s just another example of “what goes around, comes around”—what you do or say today will come back to you in the future. So, does this mean that there are no original strategies to address the fiscal conundrum in Connecticut? Not necessarily, but let’s not be so naive as to acknowledge this as critical thinking by our Liberal folks across the aisle. Many view Milton Friedman as a Libertarian. We do know that his political philosophy extolled the virtues of a free market economic system with minimal intervention. Perhaps, Senator Looney has “blinked.”