Why We Should Expand the Earned Income Tax Credit to More Americans•
Opportunity Nation’s diverse coalition has long supported the Earned Income Tax Credit (EITC), one of the most effective anti-poverty programs of the last 40 years, and one that has benefitted millions of low-income families. But the EITC needs to be expanded to help lift more Americans out of poverty, especially adults without children and noncustodial parents.
The Earned Income Tax Credit was designed to give low-wage workers an incentive to work instead of relying on assistance from the government. Currently, it favors workers with children.
President Obama’s budget includes $60 billion that would expand the EITC to an additional 13.5 million Americans who are working yet remain poor. It would also increase the tax break for childless workers.
Currently, single working adults with two children who earn less than $43,756 can claim a maximum credit of $5,460. However, those without children cannot receive the credit unless they earn less than $14,590 and in that case, the maximum credit is just $496. Under the expansion, such workers could earn as much as $18,000 per year and receive a credit of about $1,000.
An expansion also seems to be one of the few budget proposals to enjoy bipartisan support, with leading Republicans such as House Budget Committee Chairman Paul Ryan (R-WI) and conservative think tanks touting the idea.
According to the White House, the expansion would lift nearly half a million Americans above the federal poverty line and reduce the depth of poverty for about 10 million people.
Opportunity Nation believes the expansion of the EITC could be an important step our elected officials can take this year that would significantly help low-wage workers move up the ladder of economic security. We strongly urge Congress to support the expansion of the EITC.
Decades of evidence show that the EITC is a useful tool to encourage people to work and to eliminate poverty. We are hopeful this important program will be one Democrats and Republicans can agree on and expand this credit to help even more Americans.