EITC aid boosts isle families, economy

Everyone deserves the opportunity to live in a place where they can thrive. But our current economic state, exacerbated by the pandemic, left half of Hawaiʻi’s families financially unstable, and has led to our fourth-in-the-nation outmigration rate. That’s bad news. Not just for the people struggling to get by, or for those forced to leave, but for all of us.

Losing workers and consumers creates a risk of prolonged recession and a reduced tax base that makes it impossible to improve or even maintain basic services and infrastructure.

We need to reverse this trend by tackling the growing issue of income inequality in Hawaiʻi together. While we will undoubtedly disagree on some of the proposed solutions, there are a few that nearly everyone can agree on that can be done right now. One opportunity is expanding the state Earned Income Tax Credit (EITC) to make it both permanent and refundable.

Hawaiʻi’s EITC will expire at the end of the year if our state Legislature does not urgently act by April 28. But the Legislature has an opportunity to not just extend the program for a few years, it can commit to fund it in perpetuity and expand it to reach more of the families that need it most. Under a refundable EITC, when an individual’s tax liability is smaller than the amount of the credit, they are given a refund check for the difference. Doing this would boost the incomes of close to 100,000 households by an average of $424 annually.

As a state, we cannot afford to let a policy like EITC expire. It continues to serve as a vital tool for investing in Hawaiʻi’s working families and a link to strengthening our economy and communities.