State Auditor says tax credit funded by TANF would be better use of the funds, address labor shortage

Published: Oct. 18, 2022 at 11:01 PM CDT
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JACKSON, Miss. (WLBT) - As the state works to find a better way to utilize its TANF money, State Auditor Shad White suggested it funds an Earned Income Tax Credit (EITC).

“Now is the opportunity to say, ‘All right, since we have learned from those mistakes in the past, what are we going to do with this TANF money that we get from the federal government,’” he said.

He said this would not only be a better use of the funds, but it would also address the ongoing labor shortage.

The labor shortage is particularly bad in Mississippi, according to the Department of Labor, which reports MS as having a smaller percentage of adults in the labor force than any other state besides West Virginia.

“The idea behind it is pretty simple. If somebody goes from not working to working, they get a tax credit on top of their salary,” White explained. “As they stay at that job for an increased amount of time and make more money, the tax credit actually goes up. Eventually, it plateaus, and then it goes away.”

“What this does is incentivize people to get up, get off the couch, get off government assistance, get into the workforce, take responsibility for their own lives, and improve their lives as a part of that process,” he said.

White said 29 other states already have an EITC in place, and twenty of those states use TANF money to pay for it.

By funding it that way, he said our state could implement it without a tax increase.

“Mississippi needs an EITC just to keep up with the other 29 states who have already put this into place. States all the way from Louisiana to Maine are putting this into place now and given our labor shortage, this is something we ought to be thinking about in Mississippi too.”

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