Newspaper article Sarasota Herald Tribune

Save the Pro-Work, Anti-Poverty Tax Credit

Newspaper article Sarasota Herald Tribune

Save the Pro-Work, Anti-Poverty Tax Credit

Article excerpt


The Earned Income Tax Credit has rewarded work and helped to keep millions of Americans, including children, out of poverty.

Yet, unless Congress acts affirmatively to extend the credit, it will expire in 2017.

Allowing the EITC to end would be a travesty -- another sign that the two major political parties and their leaders are incapable of sound governance, another setback for American workers struggling to make ends meet.

The tax credit provided enough benefits, to the direct beneficiaries and society, to warrant stand-alone legislation. But an extension is most likely to be part of a complex tax package.

Whatever the case, the EITC and the Child Tax Credits should be permanently extended as soon as possible.

The EITC is designed to offset the federal payroll and income taxes paid by low- and moderate-income Americans with jobs. The amount of the credit rises with earned income until it reaches a cap. After workers reach the cap, the amount of the credit is lowered. The credit is considered refundable; in other words, if a low-wage worker's credit exceeds his tax liability, the Internal Revenue Service issues a cash refund. (The Child Tax Credits have similar parameters.)

Based on the latest available data, in the 2013 tax year, more than 27 million families and individuals received the EITC. The credit lifted 6.2 million Americans, including 3.2 million children, out of poverty, according to the nonpartisan and left-leaning Center on Budget and Policy Priorities.

Many conservatives like the credit because, as the center notes, it creates incentives for people to leave welfare for work and for low-wage employees to increase their work hours. That's because a worker's credit increases with each dollar of earnings until the maximum value is reached. The center cites studies showing a link between eligibility for the credit and workforce entry. …

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