Journal Article Earned Income Tax Credit in the United States
Elaine Maag
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The Earned Income Tax Credit (EITC) provides substantial assistance to low-income working families with children. The credit encourages work for many, though may reduce work or wages for some. Counted in the poverty measure, the EITC would have been credited with lifting 6.5 million people out of poverty in 2012. The credit fails to provide substantial benefits to workers without children, is complicated, has a high erroneous payment rate, and creates substantial marriage penalties for some low- and moderate-income couples. Extending the credit to workers without children or replacing it with an individual worker credit could solve some or all of these criticisms.
Research Areas Wealth and financial well-being Families Social safety net Taxes and budgets
Tags Families with low incomes Poverty Economic well-being Wages and nonwage compensation Workers in low-wage jobs Refundable tax credits Earned income tax credit Individual taxes Family credit and debt
Policy Centers Urban-Brookings Tax Policy Center