Cash stimulus is a powerful health policy solution to economic hardship, and is all the more critical as hundreds of thousands of Washingtonians lose their livelihoods because of COVID-19. Cash provides essential support to people who are struggling to meet their basic needs and supports the well-being of individuals and families. We all know people have better health outcomes when they aren’t struggling to put food on the table or worrying about keeping a roof overhead.
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That’s why a coalition of more than 30 organizations in Washington state – including Washington Physicians for Social Responsibility, Northwest Harvest, and the Washington State Budget & Policy Center – is calling on lawmakers to provide direct cash assistance to the people most impacted by this economic crisis. We envision an equitable, two-part state cash stimulus approach that would:
- Provide stimulus payments to people with low incomes in the form of a Recovery Rebate, including people filing a tax return with an Individual Taxpayer Identification Number (ITIN) and some people who do vital but unpaid work (like caregivers).
- Create an annual state Recovery Rebate using the framework of the Working Families Tax Credit – the state version of the highly successful federal anti-poverty tool, the Earned Income Tax Credit (EITC) – to support Washingtonians throughout the recovery.
To create the initial stimulus payments, lawmakers can leverage some of the money the state received from the federal Coronavirus Relief Fund. To fund the long-term investment, lawmakers can enact much-needed progressive state revenue – by passing a state capital gains tax on the ultra-wealthy and removing unnecessary corporate tax breaks.
A refundable tax credit or rebate – similar to the EITC and recent federal stimulus payments – would provide Washington households with the needed flexibility to cover general expenses, from utility bills to resources for kids in school. Tax credits can support the economic stability of families with low incomes. Initial analysis on the federal stimulus payments shows that families with less than $500 in liquid savings spent almost half of stimulus payments quickly to cover essentials like groceries.
Cash assistance policies like tax credits promote health and support the well-being of recipients and their families. For example, kids in families that receive tax credits have had better math and reading scores, high school graduation rates, and college success. People with access to extra cash in their pockets can alleviate housing cost burdens and have greater housing stability. Cash stimulus programs can also promote greater maternal and child health.
Further, this Recovery Rebate would have important positive impacts on racial equity. Communities of color would see an outsized benefit from this rebate because – due to historical and persistent racial inequities and racist policies – they are more likely to have lower incomes. Black, Latinx, and Native American communities would be especially bolstered by the rebate.
Additionally, ITIN tax filers – which includes undocumented immigrants electing to file and pay federal taxes – have been unjustly excluded from the federal stimulus bills so far. Including ITIN tax filers in state cash stimulus efforts will provide critical stability to undocumented people who are providing essential services like health care, home care, and food to people across the state.
There is a reason why cash stimulus proposals are being touted by lawmakers in cities, states, and nationwide during this economic crisis. Low-barrier cash assistance is what families and economies need right now and for the foreseeable future. Washington state’s lawmakers should enact this Recovery Rebate to protect the health and well-being of the communities hardest hit by this public health and economic crisis.
Emily Vyhnanek is the Working Families Tax Credit campaign manager and Margaret Babayan is a policy analyst. They both work at the Washington State Budget & Policy Center, an organization that works to advance the economic well-being of people in Washington
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