Earned-Income-Tax-Credit-Testimony

							               Testimony from John Shoos on behalf of the United Way of Greater Portland

                 In Support of LD 695: An Act To Reduce Taxes and Promote Employment



Senator Trahan, Representative Knight and members of the Joint Standing Committee on Taxation my name
is John Shoos and I am speaking today on behalf of the United Way of Greater Portland in support of LD 695.

Increasing the financial stability of lower-income individuals and families is a key goal of United Way. We
support programs that help meet people’s basic needs like food, shelter and emergency assistance. We also
invest in strategies that address the underlying causes of poverty. This includes improving access to quality
early care and education and helping kids succeed in school. Since 2005 we have coordinated the Financial
Stability Partnership and CA$H (Creating Savings Assets and Hope) in Greater Portland. As part of this work,
we offer free tax preparation for people who earn $50,000 or less. We train volunteers to be IRS certified tax
preparers and coaches. This year we helped 679 clients receive $1,500,563 in federal and state refunds and
260 clients receive $427,363 in Earned Income Tax Credits, a 21% increase over 2010.

We have found the EITC to be a powerful incentive to engage families and individuals in discussions about
ways they can make the most of their money and achieve long-term financial stability. We are able to help
clients gain access to other community services that assist them with credit counseling, money management,
building short and long-term savings, home ownership and workforce development.

In 2009, 46,000 Mainers received the state EITC. It is an important supplement to the federal EITC. Working
families with children are boosted by this tax credit. We know from the latest Maine Kids Count report that
more than 1 in 5 Maine children under age 5 live in poverty. Children who live in poverty are more likely to
have difficulty in school and to learn less as adults. Tax relief is an important tool for lifting families out of
poverty.

The EITC is also an important economic development tool because the taxpayers who receive this credit will
invest the money right back into the State economy by purchasing goods, investing in education or continuing
to pay off debts. The taxpayers who benefit from the EITC are those who need the most help and are an
important part of the Maine economy.

We encourage the Committee to consider the importance of a refundable and expanded state EITC, and urge
its inclusion in current and future tax reform discussions.

Thank you for your time, leadership and service.