Colorado Senate Bill 13-001, as announced yesterday by the Democratic Majority Office:
When the Colorado General Assembly reconvenes on January 9, President Morse will introduce Senate Bill 1, the Colorado Working Families Economic Opportunity Act of 2013. The Act would create a tax credit for working families, a child and dependent care credit, and a child tax credit against state income taxes.
Many Colorado families are still struggling from the impact of our slow economic recovery, which has made it hard for wages to keep up with the increasing costs of basic necessities like childcare and transportation. This bill could provide a financial boost for more than 370,000 working families.
The Colorado Working Families Economic Opportunity Act is a refund mechanism funded by a state revenue surplus, in accordance with the Taxpayers Bill of Rights (TABOR). Additionally, this proposed legislation would not create more government or bureaucracy because it is based upon already established federal guidelines and qualifications for earned income tax credits.
As further explained by KRDO-TV Colorado Springs:
Senate Bill One, the Colorado Working Families Economic Opportunity Act of 2013 proposes three tax credits. One would be for families who earn up to $60,000, the second would be for families with children and the third would be for families who provide for someone like children or an elderly parent.
“If you’ve got a single mom with two kids, making $32,000 a year, she’d get about $720 worth of credit that she would then be able to use to pay for childcare, pay for medical expenses, pay for transportation expenses, those kinds of things” Senator Morse said.
He said families receiving the tax credits wouldn’t be the only ones affected. He said the small businesses that employ them would also benefit, as workers would be able to attend work more consistently. And he said by spending that money they keep, those individuals would stimulate the economy.
The effect of passage of these refundable tax credits would be similar to the help to working families provided by the Democratic-favored federal Earned Income Tax Credit, and paid for with improving revenues now coming in as the economy recovers. Particularly with the recent end of the federal payroll tax “holiday” benefiting many of the same working class taxpayers, it’s tough to argue against this credit despite its expected fiscal note. As was the case with the EITC, we expect to see some impact studies showing this plan having a greater positive economic impact than, say, funding the Republican-favored Senior Homestead Exemption.
A clever initiative for Senate Democrats; we’ll be curious to see the arguments against this.