by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
My commentary yesterday on the possibility of refunding some or all of the surplus to people has generated some discussion, thanks in part to a simpler version on this blog and to comments on Twitter. A couple suggestions seemed worth pursuing.
First, refunding money to taxpayers using the same ratios we use for standard deductions. Married filing jointly would receive twice as much as single or married filing separately, and head of household would receive 1.6 times a single filer. This would result in refunds of roughly $40 (Single/Married Filing Separately), $60 (Head of Household), and $80 (Married Filing Jointly) at $266 million up to $360, $580, and $730 at $2.7 billion.
Second, the state could provide refunds that mimic an Earned Income Tax Credit, concentrating payments among families earning less than $55,000. Based on the $115 million fiscal note for HB238, which would provide an EITC at 5% of the federal level, $266 million would provide a refund equivalent to 11% of the federal EITC.
Any other variations I missed?
I’d prefer saving the cash, but continue to agree with Rizzo…