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Expanding the EITC for Childless Workers: An Important Step to Make Work Pay |
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From Center on Budget and Policy Priorities: A number of bills currently before Congress would expand the component of the Earned Income Tax Credit available to low-income working adults who are not raising minor children. Legislation to expand the childless workers' EITC also has been introduced this year by Senators Barack Obama and Evan Bayh, and by Senator John Kerry and Representative Bill Pascrell. Over the past two decades, policies have been enacted to improve work incentives for low-income working families with children and to help those families make ends meet. And a single childless worker with income exactly at the poverty line is eligible for an EITC of only $143, which is substantially less than the worker owes in federal income and payroll taxes. Table 2 below shows the EITC parameters under the various proposals. * For married couples, the credit begins phasing out at income levels $3,000 above those shown here. A more robust EITC for childless workers potentially could have similar effects on labor-force participation among childless adults. In particular, it could help reverse the declines in labor-force participation among less-educated men, most of whom are not eligible for the EITC for families with children because they do not have children or because they are noncustodial parents. While the labor force participation rate of that group has increased since the 1970s (as have labor force participation rates for virtually all groups of women), less-educated women without children did not experience the robust employment gains achieved by single mothers in the 1990s.
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