The Earned Income Tax Credit occupies a curious space in Washington’s budget wars: it’s the rare welfare program conservatives can embrace, because it can be presented as a tax rebate, rather than a benefits check. A brainchild of the Nixon administration, the EITC has long been held up as an “incentive to work,” presumably in contrast to public assistance programs that support the unemployed.
And so the EITC, along with the parallel Child Tax Credit (CTC) aimed directly at supporting children within a household, are key pillars of both the White House budget proposal as well as the far-right counter-proposal of Representative Paul Ryan. While he rails against public assistance in general for supposedly destroying a “culture of work,” Ryan has praised the EITC as part of a conservative anti-poverty agenda, in which “federal assistance should not be a way station [but] an onramp—a quick drive back into the hustle and bustle of life.”
However, Ryan’s budget would revamp the EITC in a way that steepens the onramp out of poverty. Back in 2009, Congress expanded the tax break for lower-income families, helping to lift 1.5 million people above the poverty line. But Ryan is proposing to let this measure expire, along with other draconian welfare cuts and, in addition, to make “massive unspecified cuts amounting to hundreds of billions of dollars” from the section of the budget containing the tax credits.
Some conservatives do wish to expand low-income tax credits, but with certain revealing political caveats. For instance, one idea circulating on the right is to boost poor families with children by funding extra tax rebates for them with higher taxes on childless single people. Reihan Salam recently argued in Slate that the government should tax childless households extra in order to provide subsidies directly to parents who are raising the next generation (presumably while their child-free counterparts can live relatively carefree, unencumbered lives).
In reality, poor single, childless adults can hardly be considered freeloaders; and this is in part because the current tax code discriminates against them and favors households with kids. Childless adults under age 25 are automatically disqualified from the EITC. And those who do qualify receive little assistance.
Under the current system, according to the think tank Center on Budget and Policy Priorities, a single adult working full time at a minimum-wage job (about $14,500 per year) “will have a federal income and payroll tax burden of $2,617 in 2015—a large tax burden for someone with income this low—after receiving an EITC of just $22.”
The White House budget would specifically expand the EITC for childless workers, which would, according to CBPP, provide a much-needed boost in income stability and workforce participation among the poorest childless adults.