Earned Income Tax Credit Archive
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Off the Charts Blog Post: State Budgets: Improving, But a Long Recovery Ahead
Revised May 24, 2012
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Toomey Budget Similar to House-Passed Ryan Budget
May 9, 2012
The Senate may take up, as early as this week, a budget proposal from Senator Patrick J. Toomey (R-PA)[1] that is similar in most important respects to the budget resolution from House Budget Committee Chairman Paul Ryan (R-WI), which the House passed on March 29. [2] Like the Ryan budget, the Toomey plan (S. Con. Res. 37) would protect and extend tax cuts that … -
The False Choice of National Defense Versus Helping the Poor
April 20, 2012
House committees this week approved sharp cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), the elimination of the Social Services Block Grant, and other cuts that would harm large numbers of low- and moderate-income Americans.[1] Proponents claim the cuts are needed to generate enough savings … -
Misconceptions and Realities About Who Pays Taxes
Updated April 11, 2012
Executive Summary Close to half of U.S. households currently do not owe federal income tax. The Urban Institute-Brookings Tax Policy Center estimates that 46 percent of households will owe no federal income tax for 2011. [1] A widely cited figure is a Joint Committee on Taxation estimate that 51 percent of households paid no … -
Blog Post: Chairman Ryan’s Misleading Chart
March 27, 2012
House Budget Committee Chairman Paul Ryan recently summarized his new tax proposal this way: [W]e’re saying get rid of all the special interest loopholes and tax shelters that are disproportionately used by those higher income earners, get rid of those tax shelters, so you can lower tax rates for everybody, and make us better wired for economic growth and job creation. Chairman Ryan has also said that most tax-expenditure benefits go to high-income people. The lead tax chart in Chairman Ryan’s budget … -
Policy Basics: The Earned Income Tax Credit
Updated February 22, 2012
The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It is designed to encourage and reward work as well as offset federal payroll and income taxes. The EITC is "refundable," which means that if it exceeds a low-wage worker's income … -
Testimony: Phil Oliff, Policy Analyst, Before the Maryland House Ways and Means Committee
February 14, 2012
Madam Chair, Vice Chair, and Members of the Committee, thank you for the opportunity to testify here today. My name is Phil Oliff. I am a Policy Analyst with the Center on Budget and Policy Priorities. The Center is a nonpartisan, nonprofit organization that conducts research and … -
Contrary to "Entitlement Society" Rhetoric, Over Nine-Tenths of Entitlement Benefits Go to Elderly, Disabled, or Working Households
February 10, 2012
Some conservative critics of federal social programs, including leading presidential candidates, are sounding an alarm that the United States is rapidly becoming an “entitlement society” in which social programs are undermining the work ethic and creating a large class of Americans who prefer to depend on government benefits rather … -
Romney's Charge That Most Federal Low-Income Spending Goes for "Overhead" and "Bureaucrats" Is False
Updated January 23, 2012
Presidential candidate Mitt Romney has endorsed a proposal to eliminate major federal assistance programs for low-income Americans and turn them over to the states, often with deep funding cuts. But the rationale he offered for doing so in this past Sunday’s “Meet the Press” debate — that the federal bureaucracy … -
Media Briefing: The Effects of a Repatriation Tax Holiday
October 13, 2011
The Center on Budget and Policy Priorities held a conference call briefing to discuss the impacts of a heavily lobbied proposal to allow U.S.-based multinational companies to pay sharply lower taxes on the profits they return from overseas. This is popularly known as a “repatriation tax holiday.”
Speakers will included Edward Kleinbard, former Chief of Staff of the non-partisan Congressional Joint Committee on Taxation and now Professor of Law at the University of Southern California and the author of a new important study that bears on these issues; Chuck Marr, the Center’s Director of Federal Tax Policy; and Center President Robert Greenstein, who will serve as moderator.Duration: 16:02
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Testimony: Aviva Aron-Dine on the Distribution of Tax Burdens and the Fairness of the Tax System
May 3, 2011
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Earned Income Tax Credit Overpayment and Error Issues
Updated April 19, 2011
The federal Earned Income Tax Credit, a tax credit for low- and moderate-income working families, has been widely hailed for its success in increasing work and lowering welfare receipt, reducing poverty, and making the tax code fairer. (See the box below.) Census data indicate that the credit lifted 6.6 million individuals out of poverty in … -
A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2011
April 18, 2011
Summary The federal Earned Income Tax Credit, which began in 1975 and has been expanded several times since then, is often heralded as the most effective anti-poverty program in the United States, particularly for children in working families. In 2009 alone, it lifted 6.5 million working families, including 3.3 million children, out … -
Reforming Tax Expenditures Can Reduce Deficits While Making the Tax Code More Efficient and Equitable
April 15, 2011
With the federal budget on an unsustainable path, our country’s fiscal problems need to be addressed in a way that is both effective and equitable. Scaling back and reforming “tax expenditures” — spending that is delivered through the tax code rather than government programs — should be an important part … -
Republican Study Committee Bill Would Require Deepest Cuts in Programs For The Poor In U.S. History
April 5, 2011
Legislation unveiled last month by the Republican Study Committee, the powerful caucus that includes 176 House Republican members, would require the most severe cuts in programs for the poor in the nation’s history. Introduced by RSC Chair Jim Jordan (R-OH), Tim Scott (R-SC), and RSC Budget and Spending Task Force Chair … -
Testimony of Robert Greenstein, President, Center on Budget and Policy Priorities, Before the Senate Committee on Budget
March 9, 2011
Chairman Conrad, Ranking Member Sessions and members of the Budget Committee, thank you for the opportunity to appear before you today to discuss tax expenditures, tax reform, and what role they might play in deficit reduction. I am Robert Greenstein, president of the Center on Budget and Policy Priorities, a policy institute … -
Policy Basics: State Earned Income Tax Credits
Updated January 13, 2011
Twenty-four states (counting the District of Columbia) have created earned income tax credits (EITCs) to reduce the burden that state taxes can place on low- and moderate-income working families. These credits complement the federal EITC, which helps offset these families’ federal taxes. … -
Despite Deep Recession and High Unemployment, Government Efforts — Including the Recovery Act — Prevented Poverty from Rising in 2009, New Census Data Show
January 5, 2011
Despite a deep recession, very high unemployment, and widespread hardship, a combination of existing safety net programs and temporary expansions in them enacted in 2009 all but prevented a rise in the poverty rate that year, according to a Center analysis of new poverty data the U.S. Census Bureau released this week that … -
Zandi Analyses Show "Democratic" Measures in Tax Cut-UI Deal Boost Economy, "Republican" Measures Add to Deficit Risks
December 22, 2010
As a result of the tax cut-unemployment insurance legislation that President Obama signed into law last week, economic forecasters have substantially upgraded their outlook for 2011 (see the box on page 2). An analysis of the compromise by Mark Zandi, the chief economist for Moody’s Analytics, indicates that this greater optimism stems … -
Unpacking the Tax Cut-Unemployment Compromise
December 10, 2010
Last night, the Senate released legislative language for the tax cut-unemployment insurance compromise negotiated between President Obama and Congressional Republicans. The Joint Committee on Taxation (JCT) released an official cost estimate for the revenue portions of the bill shortly thereafter. These graphs illustrate the various components … -
State Earned Income Tax Credits: 2010 Legislative Update
Updated December 9, 2010
An Earned Income Tax Credit (EITC) modeled on the federal program of the same name is now offered in 23 states and the District of Columbia as a way to reduce taxes and supplement wages for low- and moderate-income working families. A large body of evidence has shown that the state and federal EITCs serve a number of important … -
Statement: Robert Greenstein, Executive Director, on the Tax Cut-Unemployment Insurance Deal
Updated December 8, 2010
The deal between President Obama and Republican leaders on tax cuts and unemployment insurance has two substantial positive aspects: its surprisingly strong protections for low- and middle-income working families and its stronger-than-expected boost for the economy and jobs. But it … -
How Much Would a State Earned Income Tax Credit Cost in Fiscal Year 2012?
Updated November 24, 2010
The federal Earned Income Tax Credit (EITC) is the nation’s most effective anti-poverty program for working families. It lifted 6.5 million people — including 3.3 million children — above the poverty line in 2009.[1] The 24 state-level EITCs modeled after the federal program complement it in combating … -
Some States Scaling Back Tax Credits for Low-Income Families
Revised May 3, 2010
Facing large budget shortfalls, a small number of states are scaling back tax credits for low-income working families, which not only harms some of the families hardest hit by the recession but also weakens the economy by lowering overall demand. States have other budget-balancing strategies that are better for both vulnerable … -
Press Release: State Income Taxes Push Many Working-Poor Families Deeper Into Poverty
April 29, 2010
Thirteen states taxed working-poor families deeper into poverty last year, according to a new report from the Center on Budget and Policy Priorities. In some of those states, poor families faced several hundred dollars in state income taxes — a significant amount for a family struggling to … -
Podcast: The Earned Income Tax Credit
January 29, 2010
The Earned Income Tax Credit and how it helps low-wage workers and their families is discussed by John Wancheck, Coordinator of the Center’s Earned Income Tax Credit Outreach campaign.
Duration: 4:36
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State Earned Income Tax Credits: 2008 Legislative Update
Updated October 8, 2008
Twenty-four states (counting the District of Columbia) have enacted an Earned Income Tax Credit (EITC), a tax reduction and a wage supplement for low- and moderate-income working families. State EITCs are based on the federal EITC, which a large body of evidence has shown to serve a number of important public policy goals. States … -
How Much Would a State Earned Income Tax Credit Cost in 2009?
May 5, 2008
Twenty-three states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2008 legislative session. The following provides guidelines that policymakers and others can use to estimate … -
Ways and Means Committee Chairman Charles Rangel's Proposed Expansion of the EITC for Childless Workers
October 25, 2007
The tax reform plan released today by Ways and Means Committee Chairman Charles Rangel includes a sizable increase in the component of the Earned Income Tax Credit available to low-income working adults who are not raising minor children. Senators Barack Obama, Evan Bayh, and John Kerry and Representatives Bill Pascrell, John Yarmuth, and Keith … -
Analysis of Sessions Amendment to Deny the EITC to People Working Here Legally as a Result of the Senate Immigration Bill (Amendment # 1234)
Revised June 7, 2007
The Senate yesterday adopted an amendment to the Senate immigration bill offered by Senator Jeff Sessions (R-AL). Undocumented immigrants already are ineligible for the EITC. The Sessions amendment would deny this important tax credit to low-income workers who have legal status.[1] This approach is inequitable and unwise. It … -
Analysis of Sessions Amendment to Deny the Eitc to Many Legal Permanent Residents (Amendment # 1235)
June 6, 2007
Senator Sessions has filed an amendment to the Senate immigration bill that would deny the Earned Income Tax Credit to hundreds of thousands of taxpayers already working in the country legally. Under the amendment, legal permanent residents — often called “green card” holders — would be ineligible for the EITC for the … -
State Earned Income Tax Credits and the "Overpayments" Issue
March 28, 2007
The federal Earned Income Tax Credit is a tax credit for low- and moderate-income working families. The EITC is widely hailed for its success in subsidizing work, reducing poverty and making the tax code fairer. For these reasons, 20 states have enacted EITCs that piggyback on the federal credit and thereby further its successes. … -
A State EITC Is a Cost-Effective Way to Ease Hawaii’s High Income Tax Burden on the Poor
February 14, 2007
Hawaii continues to impose a higher income tax burden on low-income working families than almost any other state. A costly tax cut enacted in 2006 did little to address this problem. As a result, Hawaii continues to collect income tax from families with income thousands of dollars below the poverty line. And families in poverty … -
Press Release: Hawaii’s Tax Burdens on Poor among the Nation’s Largest; State EITC Would Provide Targeted Relief
February 14, 2007
Hawaii levies among the nation’s highest income taxes on low-income working families and its national ranking is worsening by some measures, according to a report from the Center on Budget and Policy Priorities. Creation of a state Earned Income Tax Credit, one of two policy … -
How Much Would A State Earned Income Tax Credit Cost in 2008?
February 7, 2007
This report was updated on March 5, 2008 to reflect new data. Click here to view the new analysis. Twenty states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2007 legislative session. … -
Together, State Minimum Wages and State Earned Income Tax Credits Make Work Pay
Revised November 20, 2006
In recent years, federal policies aimed at ensuring adequate income for working families have not kept up with inflation, leaving many working families struggling to make ends meet. The particular culprit is the federal minimum wage, which has not been adjusted for inflation since 1997. Other policies such as the federal Earned … -
Tax Reform and Poverty
April 10, 2006
The tax system has a pervasive impact on poverty, both directly through its role in the distribution of society’s resources and indirectly through its effects on the incentives for economic decisions like working and saving. The two most important facets of the tax system for low-income families are payroll taxes and the Earned Income Tax Credit … -
A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2006
March 8, 2006
Executive Summary An Earned Income Tax Credit is a tax reduction and a wage supplement for low- and moderate-income working families. The federal government administers an EITC through the income tax. So do many states. States that enact EITCs can reduce child poverty, increase effective wages, and cut taxes for families struggling to make ends … -
How Much Would a State Earned Income Tax Credit Cost?
February 1, 2006
Nineteen states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2006 legislative session. The following provides guidelines that policymakers and others can use to estimate the cost of a refundable state Earned Income Tax Credit that is set at a … -
Public Benefits: Easing Poverty and Ensuring Medical Coverage
Revised August 17, 2005
When individuals and families experience crises such as job loss, illness, disability, or divorce, they may face the prospect of falling into poverty (or becoming poorer) and losing health insurance coverage. Various government assistance programs are designed to lessen these hardships. These programs also provide support when families work but have low earnings and when … -
Press Release: What Does the Safety Net Accomplish?
July 19, 2005
Public benefit programs cut the number of poor Americans nearly in half (from 58 million to 31 million) and dramatically reduce the severity of poverty for those who remain poor, while providing health coverage to tens of millions of people who otherwise would be uninsured, according to a new report from the Center on Budget and Policy … -
State Policies to Assist Working-Poor Families
December 10, 2004
Introduction For a large and growing number of Americans, having a job is not enough to lift them out of poverty. This report presents a menu of practical policy options that states can adopt to help working-poor families meet their basic needs and improve their lives. The number of people in working-poor families has grown significantly in the last two decades. In 2003, 13.1 …
