Giving Compass' Take:

• Alyson Wise and Natalie Foster argue for changes to the Earned Income Tax Credit to increase the efficacy of the program and better support those who need it most. 

• How can funders help to build bipartisan support for this type of policy change? 

• Learn how philanthropists can impact wealth inequality. 

A proven, effective policy intervention with a long history of bipartisan support, the Earned Income Tax Credit currently lifts more families out of poverty than food stamps, housing subsidies, and unemployment insurance combined. In 2016, it lifted 5.8 million people out of poverty, including 3 million children.

One Rockefeller Foundation grantee, the Economic Security Project, put forward an answer—and after conducting extensive research and modeling, created the Working Families Tax Credit. This proposal would provide up to $500 per month to every adult who is working in some way and lives in a household making less than $50,000 per year. Under this proposal, anyone who qualifies for the current federal EITC would be eligible, as well as middle-class people, younger people, caregivers, and students. Overall, the modernizations include:

  • Doubling the EITC for working families struggling with the rising cost of living (and increasing the credit for childless workers almost sixfold);
  • Expanding it up into the middle class, to acknowledge increased financial precarity up the income ladder;
  • Redefining what counts as work by including caregiving and education to help families take care of one another, acquire skills, and still get ahead; and
  • Providing the option to receive the credit monthly, simplifying the complexity of the federal EITC and making the benefit more predictable and easier to understand.

Read the full article about changes to the Earned Income Tax Credit by Alyson Wise and Natalie Foster at The Rockefeller Foundation.