Earned Income Tax Credit
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 working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children. Low-income adults with no children are eligible.[1] For a person or couple to claim one or more persons as their qualifying child, requirements such as relationship, age, and shared residency must be met. https://en.wikipedia.org/wiki/Earned_income_tax_credit
The earned income tax credit has been part of political debates in the United States over whether raising the minimum wage or increasing EITC is a better idea.[5][6][7] In a random survey of 568 members of the American Economic Association in 2011, roughly 60% of economists agreed (31.7%) or agreed with provisos (30.8%) that the earned income tax credit program should be expanded.[8] In 2021, when the survey was done again, the percentage of economists that agreed to expanding the credit increased to 90%
In 1969, Richard Nixon proposed the Family Assistance Plan, which included a guaranteed minimum income in the form of a negative income tax. The House of Representatives passed this plan, but the Senate did not. During his 1972 Presidential campaign, George McGovern proposed a demogrant of $1,000 for every American. Critics during this time complained about implying people don't have to work for a living, and saw the program as having too little stigma; during this time, Hawaii had an established residency requirement for public aid, which one Hawaii State Senator suggested was necessary to discourage "parasites in paradise".[10] Proposed by Russell Long and signed into law by President Gerald Ford as part of the Tax Reduction Act of 1975, the EITC provides an income tax credit to certain individuals.[11] Upon enactment, the EITC gave a tax credit to individuals who had at least one dependent, maintained a household, and had earned income of less than $8,000 during the year.[11] The tax credit was $400 for individuals with earned income of less than $4,000. The tax credit was an amount less than $400 for individuals whose income was between $4,000 and $7,999 during the year.
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