A lot of people look forward to their annual tax return. But Denver’s Krystal Ramsey, who describes herself as a “full-time student as well as a part-time work-study [participant]… and also a full-time mom of two,” depends on it.
Every year, Ramsey uses her refund to either have repairs done on her car or to buy a new one.
“The car that I bought this year with my taxes already exploded on the highway,” she said. “I can’t help but wonder, if I had a little bit more money, if I would have been able to acquire a better car.”
Ramsey said that because the bus service provided by Denver’s Regional Transportation District (RTD) is so spotty, she deems a personal automobile a necessity.
“I like being able to get my kids to school without having to wake them up at 4:30 in the morning to get on the bus at six,” she said. “It’s not that I’m too good for the bus, because I’ll take the bus by myself no problem, but being on the bus that early can really make it hard with children.”
During a virtual press conference Thursday, activists and lawmakers unveiled a bill, called the Helping Colorado Families Get Ahead Act, that would help people like Ramsey get a bigger tax return, which, they say, is needed more than ever due to the economic troubles triggered by the pandemic
The event was hosted by the Colorado Fiscal Institute, a progressive organization focused on the state economy, and was attended by a key sponsor of the bill, Colorado Rep. Matt Gray (D-Boulder).
“There’s going to be some hesitancy… to actually provide durable long-term relief for working families on the federal level,” he said.
“We obviously have a lot fewer fiscal resources,” Gray said of the state, “but I think what we should do with the resources we have is prioritize resources for families in our communities.”
The Helping Colorado Families Get Ahead Act would do that by minting a new state-level Child Tax Credit (CTC) for all Coloradan parents regardless of income and by expanding the existing Earned Income Tax Credit (EITC), a refundable tax credit exclusively for the working poor. The EITC is increased for those with minor dependents.
How Do They Work?
As outlined in the bill, at present Coloradans are entitled to an annual tax credit from the state worth 10% of their federal earned income tax credit. This proposal would increase the amount of that state credit to 20% of an individual’s federal earned income tax credit through 2026.
“For every dollar of EITC spent, it generates about a dollar-fifty to $2 in local economic activity,” said Esther Turcios, the legislative policy manager at the Colorado Fiscal Institute. “That means that families, workers, and businesses all benefit from this.”
The proposed CTC would entitle any Coloradan who claimed a federal child tax credit to one at the state level as well.
A press release from the Colorado Fiscal Institute described EITC and CTC as, “proven policy solutions shown to boost the incomes of families and lead to better health and educational outcomes,” which “will provide support in the aftermath of this pandemic, increase opportunity, reduce poverty and create a more fair and equitable tax code.”
“To pay for this policy,” the press release continued, “lawmakers will tap into federal relief funding and close a tax loophole.”
If passed, proponents say this bill would be a boon to Colorado’s undocumented immigrants, who have been left out of federal coronavirus response.
“We have a large group of taxpayers who are being left out,” said Colorado Sen. Chris Hansen (D-Denver). “They are an important part of our community and it is incumbent on us at the state level to not have this blind spot that the current Trump administration seems to have when it comes to undocumented filers.”
“It was important to us before the pandemic started and it’s even more important now, as we realize that the folks who are going to benefit most from this policy are also the folks who are being the hardest-hit by the pandemic,” Gray said of the bill.
Hanson said he was expecting “vociferous opposition” to the legislation.
“We’ve already seen some of that from the far-right on this policy. They like to roll out the old tropes,” he said, particularly ones about undocumented immigrants.
Gray said it’s no coincidence that if passed, these alterations to how Colorado allocates tax refunds would roll in as federal benefits roll out.
This is because, “we’re not going to solve the problems that are facing our working families by that time,” Gray said.