Dear Chairman Brady, Chairman Kaufman, and Members of the Joint Committee on Revenue

Thank you for this opportunity to provide testimony on the impact of federal tax reform on Massachusetts and its hard-working families. While it is still too early to have a complete picture of the full impact federal tax reform will have on the health of Massachusetts, we at Children’s HealthWatch are concerned about how certain provisions will affect the Commonwealth.

First, included in federal tax reform is a change in how the value of the Federal Earned Income Tax Credit is calculated. The change from standard Consumer Price Index, the calculation formerly used to determine the value of the Federal EITC, to Chained-CPI means the value of the federal EITC will be eroded over time. Because of this change, low-income families around the nation will lose out on at least $19 billion over the next decade.[i] For Massachusetts families and their children, this means a reduction in their ability to afford basic needs and achieve economic mobility. Research from the Commonwealth demonstrates that families use money received from the EITC to pay for housing, transportation, groceries, and utilities.[ii] Our own research at Children’s HealthWatch shows that when families are able to afford basic needs, their children are in better health.

Let’s not allow the recklessness of the current administration in Washington lower the trajectory of success for our children, families, and the Commonwealth. To combat this erosion of the federal EITC and the harmful effects it will have on families and children in Massachusetts, we support increasing the Massachusetts EITC to 50% of the federal credit. This will insulate children and families in Massachusetts from the erosion of the EITC and further protect them from inevitable budget cuts due to the tax reform increasing the federal budget deficit by nearly $1.5 trillion over 10 years. Lastly, inaction is simply not an option. We have the opportunity to protect families here in the Commonwealth and we must take those steps. If we do not, our failure today will be written on the bodies of children and their families for generations to come.

Thank you.

Sincerely,

Keith Chappelle

Policy Analyst

Children’s HealthWatch

[i] Drucker J and Rapperport A. The Tax Bill’s Winners and Losers. The New York Times. December 16, 2017. http://www.nytimes.com. Accessed January 25, 2018.

[ii] Halper-Meekin S et al. It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World. 1^st ed. Oakland, Califonia: University of California Press; 2015.