New Census Data Underscores Need for Missouri Earned Income Tax Credit

Statement from Amy Blouin, Missouri Budget Project Executive Director

More than one in five Missouri kids are growing up in families that can’t afford the basics necessary for a good start to life because they make so little. Although poverty slightly declined since the previous year, more Missourians are struggling than before the recession. The still high number of people struggling economically is holding back our state’s economy and hampering our kids’ futures.

According to recently released Census data, tax credits for working families – such as the Earned Income Tax Credit (EITC) – prevented 9.2 million people, including 4.8 million children, from falling into poverty in the United States. In fact, refundable tax credits (such as the EITC) had the second largest impact on lifting families out of poverty of any of the safety net programs– second only to Social Security in its effectiveness.

Fortunately, in 2017 Missouri legislators can build on this track record of success nationally by passing a state Earned Income Tax Credit. A state EITC would open the doors of opportunity for more than 500,000 Missouri families.  In addition, a state EITC that furthers the success of the national credit would boost local economies, encourage work, and improve the lives of Missouri’s children and future workforce.

Mirroring national trends, U.S. Census Bureau Estimates released today show that median income in Missouri has increased and poverty has declined since 2014. However, more than one in ten families – over 875,000 Missourians, including more than one in five children – still struggle to meet their basic needs in our state. Despite recent gains, rates of poverty remain significantly higher than before the recession. The rate of poverty among Missourians is currently 14.8%, compared to 11.2% in 2000.

Last year, a proposal to pass a state Earned Income Tax credit overwhelming passed the Missouri House, but was never voted on in the state Senate.  With so many Missourians still struggling to make ends meet, now is the time to enact a Missouri Earned Income Tax Credit and help families get on the road to stability.