The Business Council is urging lawmakers to consider another tax reduction - this time, for the poorest workers in New York State.
With a broad coalition that includes advocates for labor, human services, and local governments, The Council urged Governor Pataki and legislative leaders to expand the state's earned income tax credit (EITC).
New York's credit is worth 20 percent of the federal EITC. The Council asked that it be increased to 30 percent of the federal EITC.
"The state EITC has proven to be an important tool to supplement the wages of low and moderate income working families," the coalition said in a Feb. 25 letter to Governor Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver.
"Further, it provides a strong work incentive that assists families as they move from welfare to work," the letter added. "In short, it is the best kind of public policy because it helps those already working at low wages while also making it economically worthwhile for those entering the labor market from welfare."
New York enacted its EITC in 1994 at the urging of The Business Council and many other groups.
The EITC is worth 20 percent of the federal EITC. It is a refundable tax credit available only to workers. It is aimed at families with children that earn less than $30,000 a year. It reaches more than 1.2 million workers.
"We particularly like the simplicity of the EITC within the tax system," Ed Reinfurt, vice president of The Business Council, said in the letter to Governor Pataki and the legislative leaders.
"It gets important wage supplements to people who are already working and helps many others make the choice to leave welfare for work," he said. "It expands people's income and therefore their choices, and it accomplishes this goal through a refundable tax credit rather than a large, labor-intensive intake process."
"We think the EITC is good business."
The proposed expansion to the tax credit would add approximately $175 million to the state's budget.