Thursday, January 28, 2016
OBAMA & RYAN AGREE ON SOMETHING!
The President and the Speaker both agree that the time is ripe to expand tax cuts for low-income workers who don’t have children. And, in fact, they have nearly identical proposals to do so. Both would phase in the Earned Income Tax Credit (EITC) more quickly as a worker’s earnings rise, raise the maximum credit to about $1,000, and lower the eligibility age from 25 to 21. These changes would make a big difference. Currently, a childless worker with poverty-level wages filing his or her taxes for 2015 would receive an EITC of $172, not nearly enough to offset the $1,188 he or she owes in income tax and the employee share of payroll taxes. The proposals would give that worker an $841 EITC, a major step towards lifting the worker back to the poverty line. All told, the proposals from Obama and Ryan would lift about half a million people out of poverty and make another 10.1 million people less poor, the Treasury estimates.
Source: Center for Budget & Policy Priorities, 1/13/16, EITC