I am constantly reminded of how difficult it is for the middle-class to make ends meet, much less someone who earns close to the minimum wage. However, there’s a powerful lifeline that the government has used for decades to lift up people who are struggling: delivering money through tax credits.

Tax credits like the Child Tax Credit and Earned Income Tax Credit have been responsible for historic declines in poverty throughout the U.S.:

• The federal CTC alone lifted 2.9 million children out of poverty when it was temporarily expanded in 2021.

• In 2017, Hawaiʻi created a state-level EITC to supplement the federal one. In 2023, this state EITC was increased from 20 percent to 40 percent of the federal EITC. Combined, the federal EITC and Hawaiʻi’s EITC brought $272 million in tax relief to 82,000 local households for that year.

This year, our legislature has the opportunity to build on the proven track record of the CTC and EITC. Senate Bill 1013 would further boost Hawaiʻi’s EITC to 50 percent of the federal credit for qualifying local families with keiki.

At a cost of $30 million per year—a tiny fraction of the state’s budget—this expanded EITC would offer an average of $534 in additional tax relief to families with children making less than $27,700 a year, and $604 for those earning between $27,700—$57,100.