Abstract
Initially a program to relieve the burdens of the social security tax on low-income taxpayers, the Earned Income Tax Credit (EITC) is rapidly becoming a major income support program for the working poor and their families. This article discusses the effects of the EITC on the income status and work incentives of welfare families in New York City and Texas, assesses the distributive effect of the EITC, and investigates the extent to which the EITC helps welfare families escape poverty through work. It then places the EITC in a broader policy perspective, describing its ripple effects on this country's treatment of the working poor versus the nonworking poor, support of children, and attempts to cope with the increasing disparity in the incomes of high-wage and low-wage workers.
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