A bipartisan plan for helping the poor
Published: Sunday, March 9, 2014 at 6:01 a.m.
Last Modified: Friday, March 7, 2014 at 5:41 p.m.
My year in AmeriCorps in the mid-1990s involved a wide array of projects and places, from building homes in Homestead to helping Bostonians fill out their tax forms.
The latter experience has been on my mind lately. We worked in Boston with the Volunteer Income Tax Assistance program, which provides free tax help to lower-income folks.
Our job was helping people who qualified for the federal Earned Income Tax Credit (EITC). The credit is an income subsidy for low-wage working families, providing them with a refund check even if the credit exceeds their federal tax obligation.
The EITC was created in 1975 as a way to reward work and discourage welfare. The concept earned the program bipartisan support, with Ronald Reagan and Bill Clinton both expanding it.
Now President Barack Obama is pushing to expand the program to include more single workers without kids. Obama unveiled a budget proposal last week that would make 13.5 million additional workers either newly eligible or eligible for a larger credit.
The annual income level at which childless workers qualify would rise to $18,000, and the maximum credit available to those workers would double to $1,000. More younger and older workers also would qualify.
The $60 billion cost of the proposal would be paid through closing tax loopholes that benefit investment-fund managers and some self-employed professionals.
Conservatives have been talking for months about the benefits of expanding the EITC rather than raising the minimum wage, another Obama plan. The president in his State of the Union address specifically named Sen. Marco Rubio, R-Florida, as supporting the idea of expanding the credit for childless workers.
But Rubio's plan is different in that he would replace the EITC's annual tax rebate with a monthly wage supplement. Some conservatives worry the current program is too vulnerable to fraud.
My personal experience is that it is more susceptible to confusion, with workers having to navigate an ocean of numbers to see if they qualify. Some end up losing a chunk of their refund to those tax-preparation services who use people in goofy costumes to advertise themselves.
My advice to those workers would be instead taking advantage of the Volunteer Income Tax Assistance program, offered locally through the United Way (more information can be found at www.unitedwayncfl.org/vita).
The bigger public policy question is whether the EITC is the best way to reduce poverty. Every time The Sun runs a column promoting the program's expansion as a better idea than raising the minimum wage, one of our readers calls to make the case that the EITC simply subsidizes corporations that fail to pay a living wage to their workers.
One also has to question whether conservatives like the idea simply because it helps starve the government of tax revenue. Yet however imperfect the program may be, it's rare to find an idea with bipartisan backing in the current Washington gridlock.
Now that the president has put a proposal on the table, it's up to Republicans to show they can actually pass legislation and just aren't hostile to anything associated with Obama.