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Home Publications Blogs Beat the Press That $60 Billion Increase in the Earned Income Tax Credit Is Equal to 0.14 Percent of Spending

That $60 Billion Increase in the Earned Income Tax Credit Is Equal to 0.14 Percent of Spending

Tuesday, 04 March 2014 05:54

Of course most NYT readers are well aware of the fact that the government is projected to spend around $48.5 trillion over the next decade, so they realized that President Obama's proposal to spend $60 billion more on the Earned Income Tax Credit is no big deal in terms of overall spending. That's why this NYT article saw no reason to put the number in any context. However for that tiny group of readers who don't have the total budget in their heads and may have thought this proposal would be a big deal in terms of federal spending, the CEPR Responsible Budget Reporting Calculator would quickly tell you that this spending amounts to 0.14 percent of projected spending.

The piece also includes a quote from Harvard economist Nathaniel Hendren, saying "we’re rightly concerned about budget deficits." It would have been worth reminding readers that the efforts to lower the budget deficit have cost the country at least $5 trillion (@ $17,000 per person) in lost output over the last six years and kept millions of people from working. Some NYT readers may not realize the costs the country is enduring because some people like smaller budget deficits.

Comments (3)Add Comment
written by xteeth, March 04, 2014 8:55
I would recommend against sarcasm, no matter how much it goes on in the back of your head all the time (and mine). Many people where I live actually believe this stuff as true and will quote you as if you meant it as well. Really. I very much appreciate that you continually bang your head against the same stupid level of ignorance every day and am filled with admiration. I have no idea what else to do either. Thanks again.
written by Last Mover, March 04, 2014 8:57

A better way to fund the Earned Income Tax Credit is to fund it by selected elimination of abundant Unearned Income Tax Credits to freeloader corporations on welfare.

This results is a zero impact on the budget which provides 3 reasons to celebrate. One is as an austerity move that doesn't increase debt. Two is corporations will produce more after removed from the dole of getting paid not to work.

Three, CEPR's Responsible Budget Calculator isn't necessary. Even moronic sock puppets for the 1% know what zero means.
should be allowed to account for growth in the costs....
written by pete, March 05, 2014 2:22
EITC, unlike unemployment, actually pays people to work, rather than paying them not to work. Thus there is more stuff, i.e., GDP. Indeed it functions to overcome regulatory obstacles, such as the minimum wage. To the firm, the employee is only worth the minimum wage. To society, the value of the employee working rather than collecting unemployment is immense. So society subsidizes the wage. It should be more direct, as a wage supplement, so that the potential employee would see the incentive, rather than waiting 15 months to find out they get an EITC credit. Could be paid for with a carbon or gas tax, but somehow these are off the table??? What about that climate change....

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.