As Congress hashes out an economic stimulus plan that could land a $300 to $1,200 check in your mailbox, state lawmakers are pitching their own plan to put a couple hundred dollars more in the pockets of hundreds of thousands of Washington’s working poor.
Senate Bill 6809, introduced late Wednesday by state Sen. Craig Pridemore, calls for the state to pay a 10 percent match to Washingtonians who annually claim about $600 million through the federal Earned Income Tax Credit.
The federal credit averages $1,668. So Washingtonians would see checks averaging about $167. The state would simply get a mailing list from the federal government and send out postcards telling people how to apply for the extra state payment.
The idea comes from the Washington State Budget and Policy Center, which estimates it would cost the state about $60 million a year to send the checks to more than 350,000 Washington tax filers who qualify for the federal credit. Nearly half, 23, of the states, the group says, have a similar program already.
“I’m very intrigued by this concept,” said Senate Majority Leader Lisa Brown, D-Spokane. “It’s a way to give some tax relief to families that really need it.”
The proposal could face resistance from Republican lawmakers. Sen. Joe Zarelli, R-Ridgefield, said he thinks it would violate the state constitution.
“We need to talk about what it really is: a redistribution of wealth,” he said.
Rather than take money from some taxpayers and send it to others, he said, “I think we’d be better served by reducing the burden of taxes.”
Under Pridemore’s bill, the money would be considered a low-income tax exemption from the sales tax.
“The rationale behind it is that they’ve already paid the tax” by buying things, he said. And since low-income people often don’t itemize on their federal tax returns, they don’t benefit from a relatively new law allowing people to deduct hundreds of dollars a year in Washington sales tax from their federal tax bill.
“I have sat here for three years now in the Legislature in Olympia and I’ve seen us do tax cuts and tax cuts and tax cuts for wealthy people and businesses,” said Pridemore. “This is a tax cut for people who really need the help.”