Illinois Should Enhance its Earned Income Tax Credit and Create a Child Tax Credit
Release: February 2, 2022
The Earned Income Tax Credit, or “EITC,” rewards work and reduces poverty by targeting tax relief to low-income families with children. The EITC has become one of the more effective anti-poverty programs in the United States. The reason the federal EITC is so effective is because it is designed as a “refundable” tax credit. When a tax credit is “refundable,” the taxpayer who qualifies to receive it gets the full dollar value of the credit, even if that dollar value exceeds the income tax liability said taxpayer owes. The EITC effectively boosts the earnings of workers who qualify to receive it, thereby increasing their purchasing power and alleviating poverty. The Child Tax Credit (“CTC”) initially provided qualified taxpayers with a $400 per child nonrefundable credit and was intended to provide tax relief to middle-income families. In 2001, the CTC was made refundable, on a limited basis, with a maximum refundable benefit of $600. Its refundability feature also makes the CTC effective at making tax policy fairer, because like the EITC, the CTC functions to offset taxes other than income taxes—like sales, excise and property taxes—which place a disproportionate burden on lower income earners. Illinois currently does not have a CTC at the state level. In addition to alleviating poverty and stimulating the economy, the refundability feature of the EITC also creates a very effective, as well as administratively facile way to make tax burden fairer.
Good Money After Bad: "Transferability" Would Make EDGE Tax Credits Even More Dubious Economic Policy
Release: May 15, 2017
The Economic Development for a Growing Economy ("EDGE") Tax Credit program has released more than $1.6 billion in credits to companies promising to create or retain jobs in Illinois since its creation in 1999. But the evidence that tax incentive programs like EDGE produce real economic growth is limited, and EDGE credits in particular have been abused by companies simply moving jobs from one part of the state to another, as found by a 2015 Chicago Tribune investigation.
Wrong Time to Implement New Tax Breaks
Release: November 30, 2011
An analysis of Senate Bill 397 of the 97th General Assembly, which would have provided $250 million tax expenditures to various businesses at a time when Illinois was facing budget deficit and cuts to spending on core services.
Written Summary of Corporate Income Tax Expenditure Testimony
Release: July 19, 2011
The written summary of Ralph Martire's testimony on corporate income tax expenditures to the joint House and Senate revenue committee in August 2011.
Landmark Decision by the Illinois Supreme Court in Provena Covenant Medical Center
Release: March 18, 2010
A Fact Sheet on the Illinois Supreme Court's ruling on Provena.