Tax change helps military, group says
RICHMOND—A fiscal policy group says Virginia military families could be helped if the state made its earned income tax credit refundable.
In a news conference, Michael Cassidy of the Commonwealth Institute said about 1.5 million military families nationwide receive the federal version of the earned income tax credit or the child tax credit, including about 56,000 families in military-heavy Virginia.
The tax credit is for low- to moderate-income families, but you have to be working to get it. Virginia’s version of the credit is 20 percent of what a family would get from the federal credit. But it’s not refundable in Virginia, so if a family’s tax liability is less than the amount of the credit, the family doesn’t get the extra money.
Cassidy thinks they should, because the cash would help offset tax increases on sales and gas that the state enacted last year, and would help improve the economy, he said.
“It provides targeted tax relief,” Cassidy said.
Del. Ken Plum, D–Fairfax, has a bill that would make Virginia’s EITC refundable. He said the recession has increased income disparity, and that a tax credit that gave workers more money would help local businesses, since people with more money spend more money.
Plum and Sen. Dave Marsden, D–Fairfax, also are pushing bills to raise Virginia’s minimum wage—something unlikely to get far in the business-friendly General Assembly.
Both bills would raise the wage to $9.25 an hour by July 1, 2015.
Marsden said after the news conference that if the minimum wage had kept up with inflation, it would be $10.55 an hour now.
Businesses, he said, have benefited from those depressed wages over the years.
He thinks the economy would get a boost from higher-paid workers.
“This is why retail sales are down. No one has any money,” Marsden said.
Chelyen Davis: 804/343-2245, email@example.com