Shane Massey is a Republican and the Senate Majority Leader in South Carolina. He’s not exactly a flaming liberal.
Yet he supports the creation of a state Earned Income Tax Credit to help 150,000 of South Carolina’s poorer residents. He knows the EITC is no giveaway to the shiftless. It is exactly the kind of tax cut conservatives should support because it encourages work.
“It has been one of the most successful tools to help lift people out of poverty and it does that by requiring that people work,” Massey said, according to The State newspaper. “It is an earned-income tax credit, so you have to have earned income to receive it.”
South Carolina’s Republican House and Senate last month made the state the 27th to have an EITC to augment the federal one. They set an example North Carolina legislators should follow.
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North Carolina Republicans killed this state’s EITC beginning in 2014. But some of the legislators who drove that effort are gone. Today, there are Republican legislators who might partner with Democrats to reinstate the credit. It’s unlikely this session but is possible next year.
The credit has been shown to effectively fight poverty and especially help children who grow up in it. That’s why every president – Republican and Democrat – has supported it since its creation in 1976. Conservative icon Ronald Reagan supported the federal EITC’s expansion in 1986. Paul Ryan, now the Republican House Speaker, endorsed President Obama’s proposal to expand the EITC in 2014.
Poor people who receive government benefits are often portrayed as lazy moochers. But the truth is that hundreds of thousands of North Carolinians are working but not earning enough to stay out of poverty. The EITC rewards them for their efforts and does not give away the store. A reinstated N.C. EITC would give typical recipients a few hundred dollars, which they would promptly put back into the economy buying groceries or other basic necessities.
In South Carolina, the EITC passed when Democrats partnered with Republicans who were looking to offset an increase in the state’s gas tax. The way they did it limits the EITC’s effectiveness, though. Legislators made the credit nonrefundable, which means people who pay little to no state income tax get little to no benefit from the credit. A more effective EITC, and the one North Carolina should adopt, is a refundable credit. With that, taxpayers receive the full amount of the credit even if it’s more than their state income tax tab. Most poor people pay little in income tax but a sizable portion of their income on other taxes.
The IRS is rightly criticized for paying the credit to some people who are not eligible. But that’s an indictment of the IRS, not the credit.
Those in North Carolina’s legislative majority are proud of their conservative bona fides. They should polish them up further by looking at the EITC example set by their conservative neighbors to the south.