President Reagan called the Earned Income Tax Credit the “best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”

The federal EITC rewards work by adding almost $2 per hour to the pay of low income working families with children. Eighteen states have their own EITCs. Eleven states have adopted EITCs since 1997. An Arkansas state earned income tax credit, or EITC, would be easy to administer, would stimulate the state economy, and would help our families make ends meet.

A state EITC would increase the fairness of the Arkansas tax system. The current Arkansas tax system taxes our low-income working families at twice the rate of our richest citizens. The EITC puts money in the pocketbooks of working Arkansans who in turn put it to work in the local Arkansas economy. A conservative estimate is that each dollar spent equals three dollars to the state’s economy.

A state EITC equal to 20 percent of the federal EITC would provide a maximum benefit of $850 per family and cost Arkansas $98 million annually.