California is a world leader in high-tech, agriculture, entertainment and green energy. We have a world-class university system, an economy that ranks consistently in the world’s top 10, and a climate in some regions that rivals Mediterranean countries.
But taxes on our hardest working families are high too. And the burden those taxes place on people of modest means pushes too many of them on to taxpayer funded social services. I think the best way to lower those taxpayer costs is to lower the number of people who need those services.
California leads the nation in child poverty and has a consistently higher poverty rate than the rest of the country.
Now more than ever we need to foster economic opportunity and financial security for California’s working families and individuals. Currently, the legislature is considering a state tax cut that would allow families of modest means to keep more of what they earn.
That tax cut will have a positive impact on 825,000 families and 2 million individuals. And while I would love to help even more people, cutting taxes for these people living on the edge will save the rest of us money by reducing what we need to spend on social programs.
Millions of low-income working adults and their children have already benefitted from the same federal cut that President Ronald Reagan introduced nearly 30 years ago. It is a proven solution that helps advance working families.
Among the biggest beneficiaries are young children. Studies show that when we help families get ahead, young children see improvements in health, improved school performance, higher rates of college enrollment, and greater earnings in adulthood. The impacts on children are extremely important because they will have lasting positive effects that will contribute to a brighter future for generations to come.
The tax cut will help these families pay down debt and buy what they need without welfare. The opportunity to get ahead by paying overdue bills or even avoiding eviction is what everyone who works deserves.
Rewarding work puts money back into the economy and reduces the need for social programs.
The Central Valley has not yet made a full economic recovery from the Great Recession. This tax cut - the Reagan era Earned Income Tax Credit -puts more money into the hands of working residents—as much as an estimated $500 million—and boost our local economies and benefit our communities.
President Reagan wasn't right about everything - no one is. But he was right about this. It will be a win-win for Californians and our economy.