Why and How to Restructure the EITC
Published online by Cambridge University Press: 24 July 2019
Chapter 5 presents the argument for why and how the United States should reimagine the EITC. Drawing on social science research, it argues that the framing of social benefit programs matters, both to recipients and to the general public. It makes the case for splitting the EITC into two distinct parts, as other scholars and policy makers have proposed in the past: (1) a work-support credit to offset the regressive nature of payroll or self-employment taxes; and (2) a family-support credit to offset poverty. It proposes decoupling EITC delivery from the tax return filing process. Drawing upon ideas from Canada and New Zealand, the chapter also proposes more radical changes, such as determining income based on household composition rather than marital status, allowing parents who share custody to share the credits, and adjusting the size of the credits regionally or locally according to cost of living.
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