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Encouraging Signs from Yesterday’s EITC Event

Economic justice advocates should take heart from a couple of things about yesterday's media event in which a collection of groups led by the N.C. Justice Center touted the enactment of a state earned income tax credit: 1) The event got a lot of well-deserved attention; and 2) House Minority Leader Skip Stam and Senator Eddie Goodall took the time to pass out a flier entitled "Goodall Sites (sic) Flaws in Earned Income Tax Credit." 

While Stam and Goodall did manage to insert themselves into some of the coverage of the event, their presence revealed, in turn, two more things: 1) the arguments against the EITC are weak and flawed — Goodall's flier calling the EITC "welfare" didn't evidence any understanding that it's possible for poor people to deserve a tax credit even if they don't make enough to owe income taxes — do sales and excise taxes ring any bells?; and 2) progressives are being taken increasingly seriously — when was the last time anti-poverty groups had their events shadowed by the House Minority Leader?       

2 Comments

  1. Dallas Woodhouse

    February 2, 2007 at 11:55 am

    How is the world does someone come to “deserve” a tax credit for taxes they do not pay. How in the world does someone “deserve” to be given some other persons hard earned money?

    If anything it is a gift. A simple wealth transfer. I sure do not see how anyone comes to “deserve” it. If you are going to tell me people “deserve” something for hard work, I will tell you the reward is being paid and not starving. Hard work is expected for people to survive.

  2. gregflynn

    February 2, 2007 at 2:52 pm

    The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

    IRS

    EITC is intended to “make work pay.” It rewards low-wage work by decreasing the taxes that low-wage workers pay on their earnings and by supplementing their wages, and to bring a family with a full-time minimum-wage worker to the poverty line so the family does not have to raise a child in poverty. ::::: Studies have shown that the Earned Income Tax Credit generates large decreases in poverty and substantial increases in employment, as well as decreasing the amount of single parents receiving cash welfare.

    RESULTS.org

    The success of the federal EITC has led 18 states to enact their own EITCs that supplement the federal credit. ::::: The EITC has enjoyed substantial bipartisan support. President Reagan, President George H. W. Bush, and President Clinton all praised it and proposed expansions in it, and economists across the political spectrum — including conservative economists Gary Becker (a Nobel laureate) and Robert Barro, among others — have lauded it.

    Center on Budget and Policy Priorities