as amended, Mark Stone. Personal income
begin delete taxend delete: credit: earned income.
The Personal Income Tax Law authorizes various credits against the taxes imposed by that law. The federal Internal Revenue Code authorizes a refundable earned income tax credit for certain low-income individuals who have earned income and who meet certain other requirements.end delete
This bill would state the intent of the Legislature to enact legislation that would create an refundable earned income tax credit for low-income individuals working in California. The bill would also make findings and declarations in this regard.end delete
begin deleteno end delete.
State-mandated local program: no.
The people of the State of California do enact as follows:
begin delete(a)end delete begin delete end deleteThe Legislature finds and declares all of the
4 In its Supplemental Poverty Measure report for the year
52013, released in October 2014, the United States Census Bureau
6reported California’s rate of poverty to be 23.4 percent. This rate
7is the highest among all 50 states.
9 Using census data released in September 2014, the California
10Budget Project (CBP) reported that the economic recovery from
11the Great Recession has largely bypassed low- and middle-income
12Californians, with the bottom three-fifths of the income distribution
13experiencing stagnating income gains. This is contrasted with the
14top one-fifth of the income distribution experiencing gains of 52.4
17 A briefing on poverty released by the CBP in August 2014
18reports that 67 percent of families living in poverty were supported
19by one or more workers in 2012. Given that the majority of families
20living in poverty are working families in California, it is evident
21that poverty largely reflects low-paying jobs, not the absence of
24 In California, the Public Policy Institute of California (PPIC),
25in collaboration with the Stanford Center on Poverty and Inequality,
26has developed the California Poverty Measure (CPM), which
27underscores the role of California’s social safety net, amount which
28includes the CalFresh Program, CalWORKs, and the federal Earned
29Income Tax Credit (EITC), in mitigating poverty.
P3 1(5)end delete
2 Using data from 2011, a PPIC report on the CPM released
3in October 2013, reveals that 22 percent of Californians, 8.1 million
4people, lived in poverty. A comparison of CPM rates by county
5show that the three most populous counties, Los Angeles County,
6San Diego County, and Orange County, all had rates above the
7statewide CPM at 26.9 percent, 22.7 percent, and 24.3 percent,
10 The CPM rate for children statewide for children, those under
11the age of 18, was 25.1 percent, the highest rate of any age group.
12This amounts to 2.3 million of California’s children living in
15 Without need-based safety net programs and resources, over
1630 percent of Californians would be living in poverty. The absence
17of the safety net would increase the poverty rate among California’s
18children to 39 percent according to the CPM.
20 Refundable tax credits, including the federal EITC, reduced
21the poverty rate in California by 3.2 percent overall. Among
22children, the poverty rate reduction was 6 percent. This means that
23560,000 fewer children and 600,000 fewer working-age adults,
241.16 million people fewer in total, are living in poverty when
25refundable tax credits are accounted for in the CPM.
27 According to the National Conference of State Legislatures,
2825 states in the country and the District of Columbia, provide an
29EITC in addition to the federal EITC. California does not currently
30have a state EITC.
32 A Brookings Institution report issued in January 2003, shows
33that in addition to boosting the family incomes of families in
34poverty, state EITC refunds served as an important economic
35stimulus for the communities and regions of the families by
36magnifying the impact of the federal EITC overall.
37(b) Based on these findings and
declarations, it is the intent of
38the Legislature to enact legislation that would create an refundable
39earned income tax credit for low-income individuals working in