At the same time, we begin to rewrite the tax code in favor of ordinary Americans, instead of large corporations and the wealthy. (Photo: Elvert Barnes/flickr/cc)
A Bold New Idea to Boost Wages
Enlarge and expand the Earned Income Tax Credit
The challenges are well known: Working Americans are struggling to keep up with the increasing cost of living. Unemployment is low, but wages of most Americans have remained flat. More than three-quarters of Americans are now living paycheck to paycheck. Most can't afford a $500 emergency.
There's a simple and bold solution that would cost about as much as the Trump tax cut. But instead of helping corporations and the rich, it would help millions of working and middle-class Americans by putting money directly in their pockets.
It's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
I'm talking about expanding something called the Earned Income Tax Credit, or EITC. And although it's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
As it now stands, the EITC gives thousands of dollars to the working poor, with the amount of money they receive gradually decreasing as their earnings rise until they reach a cap, which is now a little over $50,000.
It works so well because it directly boosts the incomes of people who need it the most. Cash gives people freedom and dignity-- the power to decide, for example, whether to have their car repaired or buy new shoes for their kids or save for a rainy day.
When working people have money to spend, they spend most of it in the communities they live in. This, in turn, causes businesses to hire more people to meet the demand. It's a virtuous cycle that lessens poverty, makes the tax code fairer, and boosts the overall economy.
A bold new idea would be to expand this successful program in 4 simple ways:
First: Raise the maximum amount that very poor Americans receive from the Earned Income Tax Credit by several thousand dollars. This would dramatically reduce poverty in all families with someone who works full time.
Right now, a job at a $15 minimum wage plus Medicaid and food stamps still doesn't meet basic needs in much of America. Raising the Earned Income Tax Credit would ensure that every family with a full-time worker is out of poverty.
Second: Extend the Earned Income Tax Credit into the middle class, so even families earning the median family income - which was just about $76,000 in 2017 - will benefit. This would be a huge help to working-class families, many of whom are now one paycheck away from poverty.
Third: Expand the benefits of the Earned Income Tax Credit to two groups of Americans who are working hard, but not necessarily collecting paychecks: people (most of whom are women) who are caring for a child or for a senior in their family, and low-income students.
Fourth: Let people receive this money each month rather than in a lump-sum once a year at tax time, so it helps with monthly expenses - rent, food, education - or can be saved to build a financial cushion.
Presto. We create a kind of cost-of-living refund to lift the incomes of a third of Americans, the people who need it most, and we also include the working class and lower middle class.
At the same time, we begin to rewrite the tax code in favor of ordinary Americans, instead of large corporations and the wealthy.
Eighty-three percent of the benefits of the Trump tax cuts will go to the top 1 percent of Americans by 2027. Expanding and modernizing the Earned Income Tax Credit can help put things back in balance.
It's simple. It's fair. It's necessary. It's big and bold. Enlarge and expand the Earned Income Tax Credit.
We are at a crossroads
This country and this world are at a monumental crossroads. US voters have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
The challenges are well known: Working Americans are struggling to keep up with the increasing cost of living. Unemployment is low, but wages of most Americans have remained flat. More than three-quarters of Americans are now living paycheck to paycheck. Most can't afford a $500 emergency.
There's a simple and bold solution that would cost about as much as the Trump tax cut. But instead of helping corporations and the rich, it would help millions of working and middle-class Americans by putting money directly in their pockets.
It's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
I'm talking about expanding something called the Earned Income Tax Credit, or EITC. And although it's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
As it now stands, the EITC gives thousands of dollars to the working poor, with the amount of money they receive gradually decreasing as their earnings rise until they reach a cap, which is now a little over $50,000.
It works so well because it directly boosts the incomes of people who need it the most. Cash gives people freedom and dignity-- the power to decide, for example, whether to have their car repaired or buy new shoes for their kids or save for a rainy day.
When working people have money to spend, they spend most of it in the communities they live in. This, in turn, causes businesses to hire more people to meet the demand. It's a virtuous cycle that lessens poverty, makes the tax code fairer, and boosts the overall economy.
A bold new idea would be to expand this successful program in 4 simple ways:
First: Raise the maximum amount that very poor Americans receive from the Earned Income Tax Credit by several thousand dollars. This would dramatically reduce poverty in all families with someone who works full time.
Right now, a job at a $15 minimum wage plus Medicaid and food stamps still doesn't meet basic needs in much of America. Raising the Earned Income Tax Credit would ensure that every family with a full-time worker is out of poverty.
Second: Extend the Earned Income Tax Credit into the middle class, so even families earning the median family income - which was just about $76,000 in 2017 - will benefit. This would be a huge help to working-class families, many of whom are now one paycheck away from poverty.
Third: Expand the benefits of the Earned Income Tax Credit to two groups of Americans who are working hard, but not necessarily collecting paychecks: people (most of whom are women) who are caring for a child or for a senior in their family, and low-income students.
Fourth: Let people receive this money each month rather than in a lump-sum once a year at tax time, so it helps with monthly expenses - rent, food, education - or can be saved to build a financial cushion.
Presto. We create a kind of cost-of-living refund to lift the incomes of a third of Americans, the people who need it most, and we also include the working class and lower middle class.
At the same time, we begin to rewrite the tax code in favor of ordinary Americans, instead of large corporations and the wealthy.
Eighty-three percent of the benefits of the Trump tax cuts will go to the top 1 percent of Americans by 2027. Expanding and modernizing the Earned Income Tax Credit can help put things back in balance.
It's simple. It's fair. It's necessary. It's big and bold. Enlarge and expand the Earned Income Tax Credit.
The challenges are well known: Working Americans are struggling to keep up with the increasing cost of living. Unemployment is low, but wages of most Americans have remained flat. More than three-quarters of Americans are now living paycheck to paycheck. Most can't afford a $500 emergency.
There's a simple and bold solution that would cost about as much as the Trump tax cut. But instead of helping corporations and the rich, it would help millions of working and middle-class Americans by putting money directly in their pockets.
It's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
I'm talking about expanding something called the Earned Income Tax Credit, or EITC. And although it's been around for decades, it can be the basis of a revolutionary change in the lives of millions of people.
As it now stands, the EITC gives thousands of dollars to the working poor, with the amount of money they receive gradually decreasing as their earnings rise until they reach a cap, which is now a little over $50,000.
It works so well because it directly boosts the incomes of people who need it the most. Cash gives people freedom and dignity-- the power to decide, for example, whether to have their car repaired or buy new shoes for their kids or save for a rainy day.
When working people have money to spend, they spend most of it in the communities they live in. This, in turn, causes businesses to hire more people to meet the demand. It's a virtuous cycle that lessens poverty, makes the tax code fairer, and boosts the overall economy.
A bold new idea would be to expand this successful program in 4 simple ways:
First: Raise the maximum amount that very poor Americans receive from the Earned Income Tax Credit by several thousand dollars. This would dramatically reduce poverty in all families with someone who works full time.
Right now, a job at a $15 minimum wage plus Medicaid and food stamps still doesn't meet basic needs in much of America. Raising the Earned Income Tax Credit would ensure that every family with a full-time worker is out of poverty.
Second: Extend the Earned Income Tax Credit into the middle class, so even families earning the median family income - which was just about $76,000 in 2017 - will benefit. This would be a huge help to working-class families, many of whom are now one paycheck away from poverty.
Third: Expand the benefits of the Earned Income Tax Credit to two groups of Americans who are working hard, but not necessarily collecting paychecks: people (most of whom are women) who are caring for a child or for a senior in their family, and low-income students.
Fourth: Let people receive this money each month rather than in a lump-sum once a year at tax time, so it helps with monthly expenses - rent, food, education - or can be saved to build a financial cushion.
Presto. We create a kind of cost-of-living refund to lift the incomes of a third of Americans, the people who need it most, and we also include the working class and lower middle class.
At the same time, we begin to rewrite the tax code in favor of ordinary Americans, instead of large corporations and the wealthy.
Eighty-three percent of the benefits of the Trump tax cuts will go to the top 1 percent of Americans by 2027. Expanding and modernizing the Earned Income Tax Credit can help put things back in balance.
It's simple. It's fair. It's necessary. It's big and bold. Enlarge and expand the Earned Income Tax Credit.