Director of Federal Tax Policy
Federal taxes are generally designed to ensure that federal income and payroll taxes don’t tax people into — or deeper into — poverty. The glaring exception is childless adults, more than 8 million of whom are, in fact, taxed into or deeper into poverty.
That’s mostly because they’re largely excluded from the Earned Income Tax Credit (EITC), which, for them, is too small (or, for many of them, non-existent) to offset their income taxes and the employee share of their payroll taxes.
This chart highlights an example: a 25-year-old single woman making poverty-line wages in 2016 ($12,494) as a retail salesperson. Under current law, she’s taxed nearly $1,000 into poverty:
Policymakers should make it a top priority to fix this glaring flaw in the tax code by strengthening the EITC for childless workers.