Press Release Health and Social Programs United States

Critique of the Earned Income Tax Credit Sparks Renewed Scrutiny

May 26, 2020

Contact: Karen Conner, 2022814159Mail_Outline

The Earned Income Tax Credit (EITC), a decades-old means-tested benefit, is no stranger to a range of positive and negative opinions from both sides of the political aisle. But a recent critique by Matt Bruenig of the People’s Policy Project has provoked a renewed scrutiny by the left.

The Center for Economic and Policy Research (CEPR) today published two essays that respond to Bruenig’s critique and put EITC into a larger social benefit context.

Should Progressives Abandon the Earned Income Tax Credit?, by CEPR Senior Policy Fellow Shawn Fremstad, explains the EITC’s place in the array of social benefits and outlines the critiques made by conservatives, libertarians, and the Republican party. Critiques from the left are now starting to bubble up, with Bruenig being the most provocative.

In Defense of the Earned Income Tax Credit, economist Max B. Sawicky concedes, “EITC has strengths and weaknesses. In an era of mass unemployment, benefits conditional on employment are clearly inadequate.” However, given the “… yawning rift in the safety net where AFDC [Aid to Families with Dependent Children] used to be,” he sees the benefit as just part of  “…a panoply of income support programs, especially in the form of social insurance, but also through Medicaid, SNAP, and the EITC.”

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