Earned Income Tax Credit is worth saving according to the Tax Foundation
Elizabeth Malm, an economist with the conservative Tax Foundation, yesterday voiced support for the Earned Income Tax Credit (EITC) at a debate about tax reform in North Carolina, highlighting how out-of-touch North Carolina’s leadership is when it comes to its treatment of working families in tax reform efforts.
The EITC, which goes to families that work but struggle to get by due to low wages and helps them pay for basic necessities, has received backing from politicians of all stripes over the years including President Ronald Reagan. It’s not hard to see why since this modest tax credit reduces child poverty, improves kids’ chances of success as adults, and lessens the need for public assistance.
Ms. Malm’s backing of the EITC stands in stark contrast to the actions of Governor McCrory and legislative leadership, who already gave the OK to reduce the state EITC in tax year 2013 and eliminate the tax credit thereafter. This misguided decision will result in a tax hike on more than 900,000 of North Carolina’s lowest-paid workers and their families.
Taking a firm stance, Ms. Malm also noted that protecting low-income families from regressivity in the tax code is an important principle that policymakers should take seriously, and analysis of North Carolina’s current tax code makes a compelling case for this view. For instance, North Carolina already asks its lowest-paid workers to pay more as a share of their income in state and local taxes than its highest-paid workers.
It is not too late for state policymakers to heed Ms. Malm’s advice and make working families a priority.