Earned Tax Credit Policy Analysis

Decent Essays

For a start, as my policy analysis term paper, I subjectively selected the Earned Income Tax Credit (EITC), based on my personal experience with the policy and from curiosity as how the mechanisms of the policy truly operate. With that being said, “the United States federal Earned Income Tax Credit or Earned Income Credit (EITC or EIC) is a refundable tax credit for low to moderate income individuals and couples – particularly those with children” (IRS, 2013). In this paper, I will first introduce the Earned Income Tax Credit policy followed by the description of the problems/social inequalities that necessitated the policy. Next, I will then describe the policy in great detail, list the policies objectives/outcomes, and discuss any complications …show more content…

It was authenticated to help low income families, encourage single parents to seek employment; specifically, single mothers, and encourage people to work so they can qualify for the benefits the Earned Income Tax Credit supplies. In addition, American workers who are interested in acquiring the Earned Income Tax Credit must file a tax return within a certain timeframe in order to receive the full credit. Although this policy was created to battle poverty, it is estimated according to the Internal Revenue Service (2013), “that twenty percent of eligible workers do not claim the Earned Income Tax Credit” (pg. 1). To combat this, according to Beverly (2002), “Social Workers can increases the effectiveness of EITC by participating in outreach and educational campaigns, by supporting efforts to expand the credit for families, and by supporting initiatives that link the credit to targeted savings programs” (pg. …show more content…

By the same token, it did not only promote employment just for women, it equally encouraged males to work so they can quality for the benefits too. Kartik (2011), found “The Earned Income Tax Credit (EITC) is designed to augment income while encouraging work: The tax credit increases with earnings for low levels of household income, but declines and ultimately is phased out as incomes rise” (pg. 1). There are three levels of ranges that apply to the Earned Income Tax Credit: the phase-in-range; the plateau range; and the phase-out-rage that will be further explained in the policy description

Get Access