Giving Compass' Take:
- Elaine Maag and Kevin Werner provide an overview of the new presidential administration's proposed expansions to the earned income tax credit.
- Why might the current version of this benefit program provide limited aid to workers without children? How can you provide support to policy that meets the needs of Americans with and without dependents?
- Read about the EITC and COVID-19.
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As part of President Biden’s first days in office, he has proposed expanding the earned income tax credit (EITC) for workers without children living at home, who are considered “childless” for tax purposes. The expansion would triple the maximum credit, allow the credit over a larger income range, and allow workers ages 19 to 24 and ages 65 and older to receive the credit.
Tripling the maximum credit, as Biden proposes, could provide substantial assistance to low-income workers, bringing the credit close to half of the credit for workers with one child living at home. Raising the maximum credit would also mean many childless workers would be lifted out of poverty with the EITC, rather than being the only group routinely taxed into poverty by federal income and payroll taxes.
Increasing the size of the credit and the income range could create greater equity between workers with children at home and childless workers, which include some parents whose children live with someone else the majority of the year. By doing so, policymakers would help extend the EITC’s antipoverty effects to a broader group of workers.
Read the full article about increasing the EITC by Elaine Maag and Kevin Werner at Urban Institute.