The Earned Income Tax Credit

Many think that the best way to utilize the EITC is to use it in hand in hand with increase in the minimum wage. Frank Islam and Ed Crego stated “…the choice between an enhanced EITC and an increased minimum wage is a false one” (Islam & Crego, 2014). As this would give people living in the poverty level an increase in their pay checks every week and a small return once a year. Erika Williams and Chris Mai point out that “the EITC is a cost largely borne by state government….the state minimum wage is borne principally by the private sector” (Williams & Mai, 2014). By improving the two together the cost is not going to be on only one sector and instead allows both share in the cost. They also state that “the federal EITC is the single most effective tool the nation has for reducing poverty among working families and children” (Williams & Mai, 2014). Per their estimates it now helps 6.5 million (Williams & Mai, 2014) out of

Increasing minimum wage to ensure working parents are earning enough to meet the basic needs of their family, while improving access to safe and affordable housing and food can help reduce some of the negative health effects of child poverty (Sharma & Ford-Jones, 2015). Increasing the child tax benefit and gearing it to income can help ensure those with young children, who are in need, are getting the assistance they require (Collin, 2007). To address the impact poverty can have on a child’s readiness to learn, and therefore their success in school, and later in the employment market, the government needs to increase access to

Income Tax Credit”. For the most part, it seems as though the general public is under

Low-income: Applicants must have income at or below 185 percent of the U.S. Poverty Income Guidelines, or be enrolled in TANF, SNAP, or Medicaid.

Section 152(a) provides that for a taxpayer to take a dependency exemption, the potential dependent must satisfy either the qualifying child requirement or the qualifying relative requirement. Section 152(b)(2) indicates that the taxpayer is not permitted a dependency exemption for a married dependent if the married individual files a joint return. Pursuant to section 152(c), the term “qualifying child” refers to an individual who has not furnished over one-half of his or her own support and who has not attained the age of 19 or who has not attained the age of 24, if a full-time student, as of the close of such calendar year. The term “qualifying relative” under section 152(d) includes, but is not limited to, an individual whose gross income is less than the exemption amount and to whom the taxpayer provides over-half of the total individual’s support for the calendar year in which such taxable year begins. Under Reg. Sec. 1.152 (a), support received from the taxpayer is compared to the entire amount of support which the potential dependent received from all sources, including support which the individual supplied himself. Support includes food, shelter, medical and dental care, education, recreation,

The effects of the 1996 welfare reform bill helped declined caseloads on the social and economic well-being of fragile families, single mothers, and children. Although, the welfare reform was documented for making several positive changes such as reducing poverty rates, lowering the out of-wedlock childbearing, and formulated a better family structure, it is undeniable that poverty remained high among single mothers and their children. The reality of the matter was that most welfare recipients experienced serious barriers to maintain a stable employment due to their lack of skills, not having anyone available to take care of their young children when they leave for work as well as not gaining long-time employment with decent pay to help foster the family. As a result, most poor women and children were faced with the instability of economic and social future as welfare eligibility exhausted their efforts of supporting their families.

It is not enough to provide material relief to those experiencing extreme deprivation(158). Therefore the federal government should establish and create opportunities for the poor to gain and maintain their citizenship in standard living. According to the book, "$2.00 a Day" writer Kaitlyn Edin emphasize one have the strong will to work but opportunities lack extremely, in which concede the fact that there aren't enough jobs with adequate pay, hours, and stability to go around(159). On one hand, I agree with Edin that the will of the poor is there, but the federal government should play more substantive role in getting individuals jobs.For instance, stated in the book, “In-depth interviews with 209 EITC claimants in the Northeast and Midwest in 2007 showed that while TANF receipt confers stigma and shame, claiming the EITC gives people dignity and restores their pride”(172). Also the federal government need to restore relationships in the workplace, increase wage, and prevent wage theft . For example, a successful grocery store called Market Basket located in New England starts employees off at twelve dollars an hour, offer health insurance, and paid sick to all employees(164). Creating better jobs and opportunities is the government role as it is our role to maintain a job and contribute as

One of the United States most effective tools is The Earned Income Tax Credit which encourages work and improvement of family poverty (Center for American Progress, 2016). In the year of 2014 Earned Income Tax Credit helped more than 6.2 million Americans in the fight against poverty (Center for American Progress, 2016). A disadvantage to the Earned Income Tax Credit, is experienced in workers whose income is relatively low without qualifying children (Center for American Progress, 2016). In these

One of the United States most effective tools is The Earned Income Tax Credit which encourages work and improvement of family (Center for American Progress, 2016). In the year of 2014 Earned Income Tax Credit helped more than 6.2 million Americans in the fight against poverty (Center for American Progress, 2016). A disadvantage to the Earned Income Tax Credit, is experienced in workers whose income is relatively low without qualifying children (Center for American Progress, 2016). In these instances

including the Earned Income Tax Credit ( EITC) and the Child Tax Credit ( CTC) that directly

(5) The Child Tax Credit: T he amount of the credit is $1000 per child. A qualifying child is a U.S. citizen or resident who is the taxpayer’s child, adopted child, eligible foster child, stepchild, sibling, step-sibling or descendent of any of these who is less than 17years old as of the close of the calendar year in which the tax year of the taxpayer begin.

us to another alternative which is the earned-income tax credit. This benefits the working class

One of the major problems that this act of legislation causes economically is an unequal taxation of different groups based on their income. Those who make $400,000+ are taxed a rate of 39.6% of their total income. (H.R 8, 112th Congress) This does not incorporate sales tax and property taxes that are also taken each year as well. In the book “Economics in One Lesson” by Henry Hazlitt, one topic that is discussed is how taxes discourages production. In the case of The American Taxpayer Relief Act of 2012, those who are of working class category will not see a change in their tax rates. This is great since the monetary funds that they do not pay in taxes they can either invest or use in the market. However, the taxes for those who are of upper class status have the burden. As Hazlitt

In 2014, the Colorado state legislature passed House Bill 17-1002 - the Child Care Expenses Tax Credit. This bill was aimed at alleviating the exuberant costs of child care in the state by providing a small, flat-dollar tax credit to low-income, working families. Families must meet several qualifications to receive the credit in its current form: they must be making less than $60,000 per year, they must have at least one child receiving child care services from a licensed provider in the state of Colorado, they must file a federal tax return, and they must provide the proper documentation stipulated in their taxes. The credit offers these families a sum of $500 for one child receiving care or $1,000 for two or more children receiving care. This credit is available to low-income, working families separately from the more-sizable, federal child care tax credits already in place, meaning that families who meet eligibility requirements for both credits may receive both without penalty.

The state of Michigan’s Earned Income Tax Credit is a good anti-poverty mechanism for low and moderate income working families. The Michigan credit was an effective technique for achieving a reduction of the poverty rate in 2011. The Michigan Earned Income Tax Credit targets a certain income level of working families. In 2011 the state Earned Income Tax Credit reached over 700,000 households. Governor Rick Snyder does not support its state credit geared toward low income families irrespective of the amount of families that were elevated out of poverty. The tax credit advocates for children and child education, can stimulate the economy by way of the multiplier effect, and lead families to self-sufficiency.