EITC Success Undeniable, but Battles Left to be Fought
This post is part of our week-long series on the Earned Income Tax Credit to celebrate EITC Awareness Day on Friday, January 27. Check back each day for a new post!
By any measure, poverty rates have climbed over the last decade, highlighting the increasing number of individuals that are joining the millions of Americans already living without the proper resources to support their families. What these same measures have often hidden are the effects of our most valuable public assistance and anti-poverty programs on keeping families from falling into poverty altogether.
In a recent report from the Center on Budget and Policy Priorities analyzing the effects of anti-poverty programs under an alternative poverty measure adopting recommendations from the National Academy of Sciences, the combined effects of six enhancements to federal anti-poverty programs found in the 2009 Recovery Act worked to keep 6.9 million people above the poverty line. Additionally, this report attributes the specific enhancements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) in the Recovery Act for keeping 1.6 million of these individuals out of poverty. With these measures set to expire at the end of 2012, there is a looming possibility that millions of Americans may once again be pushed below the line no matter where it is drawn.
Of course, observing the number of individuals moved above or below the federal poverty line is by no means the only measure showing the effectiveness of the EITC at keeping families out of poverty. Using the Supplemental Poverty Measure developed by the U.S. Census Bureau, the overall poverty rate ticks up slightly higher to 16 percent. However, and more significantly, the Census Bureau’s analysis reveals that the assistance specifically provided by the EITC reduced the overall rate by two percentage points, accounting for millions of individuals. Again, this demonstrates the real relief that a single, well-crafted and targeted tax credit like the EITC can have at keeping families and children from becoming another statistic of poverty.
Measurement and analysis alone will not lay the path we need to achieve real poverty relief. As National EITC Awareness Day approaches this week, we need to recognize that these indicators represent real families that benefit from our nation’s largest anti-poverty program, the EITC. Let’s remember to use this week to build awareness of not only the working families who have been kept above the line by the EITC but of the policy changes we must make to help those we have yet to lift up.
By Holden Weisman, Policy Analyst