The objective of the Tax Credit
On the news released by The Item, the State House of Representatives passes the creation of bills for the State-level Earned Income Tax Credit and Child Dependent Care Enhancement Tax Credit Program with the goal of helping the working families of the state.
House Bill 1259 known as the Tax Reform 1971 (Child Dependent Care Enhancement Tax Credit Program) passed on a 141-62 vote with 102 Democrats and 39 Republicans. While House Bill 1272 known as the Tax Reform Code of 1971 in personal income tax, a special tax provision for poverty has a tighter vote with 122-81 with 20 Republicans in favor of the proposal.
Republicans agree with the aim of the bill but oppose the cost if the bill will be implemented soon. However, the Democrats won on their tax credit for people excluding the corporations. The budget for the bill implementation will be coming from the unallocated money in the current budget amounting to $ 5.5 billion with an additional $5 billion from the Rainy-Day Fund.
Child Care Expenditures
Looking from the perspective of low-class families, nearly about 19% of the family’s salary is spent on child care. Roughly around $8500 to $12,150 on average is spent on child care depending on the child’s age. Which house representatives are trying to address.
In the previous year, the lower chamber approved a tax code for the Child and Dependent Program that provides $180 to $315 for families having a single child and $360 to $630 for families with two or more children as reported by the Department of Revenue.
Digits were presented that if the bill shall be passed, it incrementally increased maximizing to $900 for families with a single child and up to $1800 for families with two and more children will cost the state about $97.5 million in the following year and 1.15 billion for the next five years. Senate Representative Jonathan Fritz, R-Wayne/Susquehanna stated that they must think of a responsible legislative budgeting by balancing the revenues as well as the expenses. The loss of revenue will not be caused by the spending but by the credits.
Minority Leader Rep. Bryan Cutler, R-Lancaster stated that the proposal does not only benefit low-income families but also the middle class and even families with greater capabilities. Even Majority Leader Rep Matt Bradford, D-Montgomery opposes the proposal of child and dependent care since families with greater income can benefit from the proposed bill.