Monthly Archives: April 2011
The federal Earned Income Tax Credit, which began in 1975 and has been expanded several times since then, is often heralded as the most effective anti-poverty program in the United States, particularly for children in working families. In 2009 alone, it lifted 6.5 million working families, including 3.3 million children, out of poverty.
The credit effectively boosts the income of working families earning low wages by offsetting their income and payroll taxes and increasing their workforce participation. In other words, it makes work pay by allowing low- and moderate-income families to keep more of what they earn.
State EITCs build on the success of the federal credit. They reduce state income taxes and help families pay for state and local sales and property taxes, which hit lower-income households hardest. They enhance the federal EITC’s positive effects on workforce participation and boost the after-tax incomes of working families, further reducing poverty.
The first state EITC was offered in 1987 in Maryland. Since that time, 22 additional states plus the District of Columbia have followed suit, creating their own EITCs. They are effective and straightforward to design and administer. And over the years, they have received support from Republican and Democratic leadership and have been championed by business, labor, faith-based, and social service advocacy groups.
Today, with working families battered by economic problems as never before, state EITCs play a particularly important role. Families use EITCs to fill in for the loss of wages that can result from reductions in hours or layoffs. As long as they are still working at least some hours a year, families can benefit from the EITC.
Read A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2011, a report published by the Center on Budget and Policy Priorities.
Without Unions, the Middle Class Withers
A study released by the Center for American Progress American Worker Project reveals the importance of unions in creating and keeping a strong middle class.
Why should anyone—especially those who are not union members—care that union membership is at record lows and likely to fall even further? Because if you care about the middle class, you need to care about unions.
Critics of unions claim they are unimportant today or even harmful to the economy, but unions are essential for building a strong middle class. And rebuilding the middle class after decades of decline and stagnation is essential for restoring our economy.
Unions make the middle class strong by ensuring workers have a strong voice in both the market and in our democracy. When unions are strong they are able to ensure that workers are paid fair wages, receive the training they need to advance to the middle class, and are considered in corporate decision-making processes. Unions also promote political participation among all Americans, and help workers secure government policies that support the middle class, such as Social Security, family leave, and the minimum wage.
[Directly excerpted from the Center for American Progress American Worker Project on April 17, 2011. Download the complete study Unions Make the Middle Class.]
The Center on Budget and Policy Priorities (CBPP) is one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.
With the April 18 tax filing deadline fast approaching, the CBPP assembled the Top Ten Tax Charts to provide a big-picture look at the U.S. tax system.
[View the CBPP's Top Ten Tax Charts].
Senator Dennis Egan
SB 121 – Alaska Pensions
SB 121 lets teachers, Troopers, firefighters and other public employees choose one of two state retirement systems: an individual defined contribution retirement account, or earning a defined benefit pension.
A defined benefit pension takes time to earn, but rewards a record of public service by paying a guaranteed monthly benefit and, for long-term employees, health insurance. An individual defined contribution account is portable from one employer to another, and flexible in how it can be used, but makes no guarantees. SB 121 will let newly hired public servants in Alaska choose the one that fits best.
SB 121 creates a new more stable, more predictable defined benefit pension tier for teachers and public employees. A few years ago, Alaska beefed up oversight of the pension system. Now we have two actuaries analyzing the health of the pension trusts, there are more frequent experience studies and the law bars the practice of sometimes paying less than the cost of benefits. SB 121 keeps these smart reforms, making Alaska pensions stronger than ever.
And the defined benefit pensions for new employees under SB 121 will cost employers less than the pension tiers that came before, saving money for schools, cities, and the State of Alaska.
Alaska teachers and public employees don’t earn Social Security, and many even lose Social Security benefits they earned in past jobs. So for most, a defined benefit pension makes sense. Other employees will choose individual defined contribution accounts because they prefer flexibility, portability, and control, or because their plans do not include long-term service in the public sector. SB 121 maintains their option to choose an individual account.
The teachers who educate our children, the police and firefighters who protect our families, and the public employees who serve our state and cities will be able to choose the benefit that best fits their service.
View Sponsor Statement for SB 121 at aksenate.org
For more than 40 years, the National Employment Law Project (NELP) has worked to restore the promise of economic opportunity for working families across America. In partnership with grassroots and national allies, NELP promotes policies to create good jobs, enforce hard-won workplace rights, and help unemployed workers regain their economic footing. NELP’s 2010 Annual Report, “Building the Foundation of Economic Security and Opportunity for All,” contains highlights and links to all of NELP’s 2010 major research studies including:
- securing a lifeline for our nation’s unemployed workers
- helping those hit hardest by wrenching economic change
- ensuring core labor protections for low-wage and immigrant workers
- building good jobs with living wages for America’s workers
- giving workers with criminal records a second chance
[NELP's 2010 Annual Report can be accessed and downloaded here].