Tax Cut Bill Makes Successful House Debut
(April 29) – A bill to help make sure the state’s economic recovery benefits more working Coloradans and their families passed its first House committee today.
SB13-001, sponsored in the House by Rep. Daniel Kagan (D-Cherry Hills Village), would enact a permanent state earned income tax credit of 10 percent of the federal EITC, and would create a Colorado child tax credit.
As amended, the first credit would kick in as soon as the state has a budget surplus subject to a TABOR refund; the second, when the federal Marketplace Fairness Act and conforming Colorado legislation are enacted. Together, the tax credits would save approximately 400,000 low-income Colorado working families more than $100 million.
The federal EITC, the foundation for SB-1, has always had strong bipartisan support. Doing his best Ronald Reagan impersonation, Rep. Kagan quoted the former president as describing the federal credit as “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”
“It rewards and incentivizes hard work,” Rep. Kagan said. “You don’t get it unless you work.”
He noted that a state tax cut for the wealthy had continued since the last time Colorado ran a TABOR surplus, but that credits for the poor had not, leaving them paying nearly twice the state and local tax rate of the wealthy.
“When the money starts coming into the state’s coffers, let’s make sure that the benefits don’t only continue to go to the higher-income folks,” Rep. Kagan told the panel. “Let’s start bringing the lower-income folks back into the equation.”
“We can bring the economic stimulus to our low-income areas in the state,” he continued. “We can relieve the struggles of hard-working, low-income families in Colorado, and we should pass Senate Bill 1.”
A majority of the State, Veterans & Military Affairs Committee agreed, sending the bill to the Finance Committee. The vote was 7-4. Those voting against tax cuts – that’s right, in favor of higher taxes – were Republican Reps. Tim Dore (R-Elizabeth), Stephen Humphrey (R-Severance), Dan Nordberg (R-Colorado Springs) and Ray Scott (R-Grand Junction).