New Haven Independent

Posted by: DowntownNewHaven | April 2, 2008 3:18 PM

I agree with Rep. Mushinsky - the EITC is key if we want to encourage people to work their way out of poverty, develop job skills, get an education and be able to care for their families. Without a massive expansion of the EITC, preferably at the federal level, we are increasingly reaching the point where it is simply not worth working 40 hours a week because it is literally more productive (when time and money are both considered) to not work.

An analogy is, would you pay $10 a day to take the bus for 2 hours each way if your job only paid $7/hour? Probably not - it would be easier and more enjoyable (for most people) to live on food stamps. But if you had access to low-cost high-speed rail transit that got you to work in 20 minutes, that barrier would be overcome.

It isn't a question of laziness, it's simple practicality.

Posted by: Gary Doyens | April 2, 2008 3:59 PM

The federal EITC program has one of the highest rates of fraud and has been targeted by the IRS for the past several years.

If this program is so good for the poor and a key to bringing people out of poverty, are there fewer poor now than before?

If the poor use these dollars to pay for basics like heating oil, food and their electric bill (which has now doubled thanks to collective wisdom of these same legislators) how does that help the economy? It may help Southern CT Gas, the water company or home heating oil companies - what does it do for the other 99.9% of the economy?

Last year, Cam Staples dismissed my entreaties for car tax relief. I told him I had to buy a 10 year old car to avoid a heavy tax I couldn't afford which then put me at risk for higher repair bills. He didn't care.

I admire Mr. Looney's continued work for the poor. Perhaps some day, he'll find some time and energy to work for tax relief for the middle class. A shrinking number of us are footing an ever rising tide of poverty in New Haven and across Connecticut even as they roll out new plans to "solve" poverty.

What will ease the plight of the middle class and those in poverty, is to ease the cost of living here. While Looney is pushing for a piggback, DeStefano wants to tax all of us, including the same poor Looney is trying to help with a 16% sales tax hike. But also consider the state's percentage take on gross receipts of gasoline which is generating record amounts of cash for the state even as it drains our wallets, including the poor. Mr. Looney could also fix the deregulation rules on electricity that has directly lead to a more than 50% increase in our utility bills, including the poor.

Posted by: cedarhillresident | April 2, 2008 7:01 PM

Downtownnewhaven
I agree with you to a point. First Looney can't forget about the struggling middle class destine to slid into a low income statue. That needs to be address now!

But the EITC is a needed thing and will help the struggling poor and may be an incentive. But job train is needed. Not just skills but how the work force operates. Years ago going back into the work force as a divorced single mom I did take those jobs that paid nothing! I did not look at them as not worth my time...I looked at it as resume building. You have to start at the bottom before doors are opened and yes you may have to sacrifice a few years working crap jobs... but if you do them good and show your worth better jobs do come. The problem is good paying jobs are earned not handed out. Whether through an education or just plan hard work, but they are earned.

Posted by: John Padilla | April 3, 2008 10:20 AM

Mr. Doyens. Don't know where you got your information from but the IRS has never targeted the EITC program due to high rates of fraud. They have done verification audits over the past few years and have basically concluded there is no widespread cheating, no "welfare queens" getting rich off the system, and the quality of tax returns preapred by volunteer camapigns is as good as the quality of returns prepared by commercial preparers. The IRS needs to spend its time on white collar fraud. One Enron costs far more than decades of supposed EITC fraud.

I am also middle class, and I empathize with the frustrations of middle class families that are being financially squeezed. So while you had to sacrifice and buy a 10 year old car, many working poor continue to ride the buses becuase they cannot afford a car! Why are people still poor? (I know you know the asnwer to this becuase from previous postings of yours I have read I conclude you are an intelligent man) Let's see . . . how about all the decnet paying jobs that have left the US -- let alone Connecticut -- and are now in China and India? The jobs our parents held that they used to raise their kids and support families are gone. Those that remain pay far less, have no benefits, and cannot be relied upon for a career path.

My point here is don't let your frustrations about being squeezed as a middle class taxpayer drive you to condemn people who have absolutely nothing to do with that predicament. We are all being squeezed. Personally, I don't blame it on poor people. Your anger is more appropriately directed elsewhere.

Posted by: DowntownNewHaven | April 3, 2008 11:46 AM

John, the reason we are becoming poorer is not so much jobs leaving (the jobs leaving are largely ones people here don't want -- i.e., most people would rather work in a store with 30 other people than on a Chinese assembly line with 300,000 other people -- and many have been replaced with "better" jobs) but because:

1) We spend so much of our collective resources on private automobiles. The average family spends something like 25% of their income on it. Most of that money goes to Venezuela, Saudi Arabia, and other countries, or to the mostly-foreign shareholders of GM and Toyota. Also, car-based sprawl results in large chain stores filled with Chinese goods, as well as the loss of farmland, not to mention the sense of community -- whereas walkable cities encourage more local shopping, locally-produced goods, and stronger communities that are better able to deal with issues like poverty instead of just turning on the TV to drown them out. If we didn't rely on cars for every single trip, even where we are just going down the block, our country would be much more prosperous and families would have a lot more to spend on education, housing, and other needs. Changing our dependence on automobile-oriented development will require major policy changes (smart growth, major bike/ped planning, encouraging multi-modal mass transit like bike paths to Metro North and bike storage on trains, GPS chips added to CT Transit like what Yale transit has, etc.). Our country is 50 years behind the curve on this, and it is affecting our economic competitiveness in a major way.

and, of course

2) Income is not evenly distributed. Disparities in wealth have been growing larger and larger every year. The average CEO making $100 million per year pays less in taxes than someone washing dishes at the local diner. That needs to change , and the best way to do that is the expansion of EITC and higher tax rates on the very wealthy.

Posted by: Gary Doyens | April 3, 2008 4:25 PM

John Padilla: I have never referred to poor people as welfare queens, nor does the IRS dispense welfare. I don't condemn poor people nor do I blame them for the middle class death squeeze. It's not them - it's the political elites who combine good intentions with fuzzy math and blurry vision which if carried out, will kill us all. You would do well to stick to what I say, not an interpretation of such.

To my point, piggybacking of the fedeal tax credit neither solves poverty nor is it an economic stimulus. In fact, the federal tax credit is just as worthless in that respect as what Mr. Looney envisions.

So, if it's not effective at lifting people out of poverty which is its stated goal and does not stimulate the economy, then it's just another entitlement that provides a little help for two weeks.

In Connecticut, this program will cost an esimated $29 million - 50% of the last estimated surplus for this year and accomplish nothing. It will be a new program that is not revenue neutral. The Sec. of State announced a record number of business failures which is a growing tax collection concern. The issue is whether it is prudent to launch a new entitlement that the state will be expected to pay in good times and bad - and how it will pay for it when the budget is dry. Mr. Looney could well announce support for another temporary tax increase that will later be increased and made permanent.

Would it not be more effective to lower the cost of living here by making a few tax and regulatory changes statewide? Doing so would not only directly lower the monthly bills of everybody including the poor, but because you're affecting all 3.5 million people, would truly have be an economic stimulus - may even create jobs.

Posted by: John Padilla | April 3, 2008 7:07 PM

Mr. Doyens: I didn't mean to imply you referred to anyone as a welfare queen, I was using Ronald Reagan's famous phrase. I apologize for that mix-up. Your points about the tax code and tax strucutre are well taken -- that's where the problem lies. But as for the EITC, again, I don't know where you get your information from, but the EITC has proved remarkably successful in reducing poverty. It is acknowledged by both Republicans and Democrats as the most effective tool to reduce poverty. Not only was it begun by a Republican President, it has been expanded 4 times since its inception in 1975. Furthermore, the main reason it is popular on both sides of the aisle is that the EITC rewards work. It is not an entitlement, it is for people who work and simply don't earn a lot of money. For 2005, the EITC lifted over 5 million people in low-income, working families out of poverty. More than one-half of those people were children. Over 20 states have some form of a state EITC, and almost all piggyback on the Federal EITC.

As for government reducing the cost of living? Come on, you know better.

Posted by: DowntownNewHaven | April 4, 2008 8:37 PM

Nice article on the topic:
http://ncronline.org/NCR_Online/archives2/2005c/090205/090205j.php