ECONOMIC OPPORTUNITY

Texas provides unique opportunities for examining the effects of economic development (ED) on communities, because it contains both great wealth and extreme poverty. Bolstered by high-technology sectors, business and financial services, and manufacturingâ€"in addition to the still-important oil, gas, and petrochemical industriesâ€"Texas' economic growth as a whole is outpacing the nation's. Unfortunately, economic growth is not reaching all parts of the state equally, or improving all communities' economic and social well-being to the same extent.

An upcoming CPPP report examines what state government has done to promote economic development through ED programs and business tax expenditures. Incentives created by the 76th Legislature are also analyzed. Finally, recommendations are included to correct the major shortcomings of the state's economic development programs and incentives.

The Earned Income Credit (EIC) is a special tax benefit for working people who earn low or moderate incomes. The EIC reduces the tax burden on these workers, supplements their wages, and supports a transition from welfare to work. Workers who qualify for the EIC can get back some or all of the federal income tax taken out of their pay during the year and even get some additional cash. Workers whose earnings are too small to have paid taxes can still get the EIC. Benefits can be as large as $3,815, but only about 80 percent of those eligible actually claim the credit.