The television show "Lost" spent nearly $400 million during its six seasons of filming in Hawaii, according to the state in a June 17, 2010, Star-Advertiser report.
Clearly $400 million is a lot of money. Still, one must wonder, who really gets this amount? Does it stay in Hawaii? And how much does it cost to bring in this "investment"?
Then there’s a July 18, 2010, article reporting that from 2001 to 2008, the state’s Act 221, which provides qualified investments in technology businesses such as the film industry with a 100 percent tax credit, "cost the state up to $1.2 billion in forgone income tax revenues."
While I am in favor of the film industry’s presence in Hawaii, I believe that a comparison with that industry will illustrate the importance and impact of the federal Earned Income Tax Credit, or EITC. From 2005 to 2009, the IRS reports, the EITC brought more than $815 million into the state. For tax year 2009 alone, the EITC returned more than $205 million, almost all of which stays right here in Hawaii, to 102,736 Hawaii residents. That’s an average of $1,996 per eligible household. This money represents new federal funds that went directly into the pockets of workers who needed it most: low- to moderate-income workers, who spent these funds on local goods and services, thereby stimulating the economy and increasing the state’s general excise tax revenues.
FREE TAX HELP
Free tax help for families making less than $50,000 will be offered 9 a.m. to 2 p.m. Saturday at the state Capitol, room 329. For appointments call 548-8887.
For other dates and locations go to www.hawaiitaxhelp.org, or call 211.
Friday marks the fifth annual Earned Income Tax Credit Awareness Day. Due to changes brought on by the continuing economic crisis and changes in the tax laws, more workers could be eligible for the EITC this year and not know it. As a result, they may overlook claiming the EITC, which can put anywhere from $2 to $5,666 into their pockets.
The Family and Individual Self-Sufficiency Program (FISSP) at the Hawaii Alliance for Community Based Economic Development (HACBED) and its many community partners help local families claim the EITC. The FISSP began as a pilot program at Aloha United Way in 2005 to help working yet still struggling families throughout the state build assets. One of the FISSP’s major programs provides free tax preparation to thousands of families every tax-filing season. Last year, based on 1,770 surveys, we found that EITC recipients planned to use their tax credit refunds to pay bills — including food and clothing, rent, education and child care — and save for the future.
President Ronald Reagan once called the EITC "the best anti-poverty, the best pro-family, the best job-creation measure to come out of Congress."
Today President Barack Obama, with bipartisan support, looks to the EITC to be a principal part of the American Recovery and Reinvestment Act that will help low- to moderate-income Americans get through this current economic crisis.
The EITC is the federal government’s largest benefit program for working-poor Americans. According to the IRS, the EITC in 2010 paid out more than $58 billion to low-income working taxpayers, far more than other government anti-poverty programs like Temporary Assistance to Needy Families and the Supplemental Nutrition Assistance Program or food stamps.
The results of the EITC are impressive. According to the Center on Budget and Policy Priorities in tax year 2009, "the EITC is credited with lifting over 6.6 million individuals in America above the poverty line."
The more touching fact is that more than half of that number are children.
Despite the benefits that are provided by the EITC, the IRS estimates that nationally 20-25 percent of EITC eligible taxpayers fail to file for the credit. This means that as many as 34,000 taxpayers in Hawaii may not be filing for the credit. This equates to as much as $68 million in federal funds being lost to our state this year alone.
For hard-working, low-income families looking to receive their full refund without spending more money for services, community tax programs like the FISSP at HACBED offer a quality choice.