Bigger Tax Credits for Working Families Lead to Bigger, Healthier Babies

Some 1,047 babies in Georgia a year can be saved from risky, low birth weight if lawmakers pass a credit to offset state taxes for low-income working families, according to a new study. State tax credits for working families with modest wages are linked to higher birth weights for babies across the country, and larger credits lead to better health outcomes.

Led by researchers at Emory University, the analysis builds on a substantial body of evidence that highlights health benefits for mothers and children from the Earned Income Tax Credit (EITC). Established in 1974, the EITC is a federal program with a history of bipartisan support that provides a bottom-up tax cut for working families. Twenty-nine states and the District of Columbia build on the benefits of the federal EITC with similar credits to lower families’ state taxes. Georgia should too.

The EITC is associated with a range of benefits, including reduced poverty, increased workforce participation and better health outcomes. The federal EITC reduces the occurrence of low birth weight, a condition which carries developmental risks for children. The new Emory-led study expands on that connection by showing that state work credits improve birth outcomes as well. Healthier birth weight is tied to many positive outcomes, including children doing better in school and eventually earning higher wages.

Researchers analyzed data from across the U.S. over almost a decade to evaluate the effects of state work credits on the health of mothers and their children. They accounted for the size of the work credits, which are usually set as a percentage of the federal EITC, and whether families could receive the credit’s full value regardless of state income tax owed. They measured health effects through birth certificate data, which includes a baby’s birth weight and gestation period, as well as the mother’s age, education and other details.

Birth weight improvements grow with the size of state work credits, the researchers found, yielding modest but significant weight gains, particularly for newborns with the lowest birth weights. Benefits are also more pronounced in states that guarantee the full credit value to eligible families. If state lawmakers pass a Georgia Work Credit that provides a 10 percent match for the federal EITC, Georgia can realize an 8.4 percent decline in births of babies with low birth weight, the researchers estimate. That translates to more than 1,000 children born each year with a healthier weight and more promising future.

Georgia lawmakers came close earlier this year to passing a Georgia tax credit to support working families with modest wages. Two bills were introduced in the state legislature last session, one in the Senate and one in the House, to build on the success of the federal EITC in Georgia and cut state taxes from the bottom up for working families. Neither bill made it to the governor’s desk, but both remain viable for the 2018 legislative session.

Evidence continues to mount in favor of a state-level EITC in Georgia. Higher earnings, better school performance and healthier babies offer state lawmakers plenty of good reasons to pass a Georgia Work Credit in 2018.

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