The Earned Income Tax Credit, created 50 years ago, has grown to become one of the nation’s biggest anti-poverty programs. The credit provided tax relief to 23 million families in 2023, with an average benefit of approximately $2,900. A new report from Brookings examines the past, present and future of the EITC and the broad benefits it provides to low-income working families:
The EITC, for instance, significantly reduces income inequality, including narrowing racial income disparities. Research by Bradley Hardy of Georgetown and others indicates that the EITC lowers after-tax Black-white income inequality by 5% to 10% in any given year between 1980 and 2020—improving incomes of Black households relative to white households. Hilary Hoynes of the University of California, Berkeley, cited “fairly consistent evidence” that the EITC benefits children and that the effects persist into adulthood—higher levels of education, higher earnings, less poverty.
The EITC also increases labor force participation:
Research suggests that the EITC’s main influence is on the extensive margin—motivating individuals, particularly unmarried mothers, to enter the workforce. The impact is most notable among younger people, less educated individuals, those with younger children, and those in rural areas.
But the EITC could be better aligned with the federal Child Tax Credit:
One option would be to make the EITC into a tax credit for workers independent of family composition while substantially expanding the CTC to provide more targeted support to families with children. … Such restructuring would allow each credit to serve more clearly defined objectives: providing support for low-income workers through a worker credit and providing robust financial support for children through an enhanced CTC.
Look at providers, not patients, for Medicaid fraud
A recent state audit showed how Louisiana’s health department has paid nearly $10 million to insurance companies for Medicaid beneficiaries who were dead. Most of the focus on Medicaid fraud over the last few months has centered on bad actors at the individual level. Rosanna Marino, in a letter to The Times-Picayune | Baton Rouge Advocate, reminds us where the vast majority of fraud actually occurs:
What I find egregious is the private insurance companies keeping the money. Why are our politicians not outraged about that? Why is Medicaid the sole culprit? Adding additional sources to identify deceased clients and automatically contacting insurers to recoup overpayments is probably a no-brainer for Medicaid. Every penny of the current and future overpayments should be returned by the insurers with no delay once identified by Medicaid and the insurers are notified. … Most fraud identified has been perpetrated by providers. Follow the money.
States take crucial step to expand housing supply
Policymakers in nine states have enacted reforms to address chronic housing shortages. Pew’s Rachel Siegel and Linlin Liang explain how Kentucky and other states are zeroing in on zoning laws to expand the construction of manufactured homes, which are significantly cheaper than traditional homes:
Many states have also tried to reduce zoning barriers to manufactured homes, putting them on an equal playing field with other single-family homes in residential zones. These reforms limit the authority of municipalities to impose unreasonable design and zoning requirements. For example, the Kentucky Legislature just passed a bill that prohibits local governments from adopting or enforcing zoning regulations that exclude or discriminate against qualified manufactured homes.
Holding immigrant detainees at Angola
Gov. Jeff Landry and top Trump administration officials on Wednesday unveiled a new wing of Louisiana’s maximum-security prison in Angola that will hold immigrant detainees. The Times-Picayune | Baton Rouge Advocate’s Meghan Friedmann reports on the opening of the “Louisiana Lockup” facility and explains how the state has become a hub for the White House’s immigration and deportation policies:
State police recently entered into a partnership with the federal government that gives them more power to help carry out immigration laws; Landry has urged local law enforcement agencies to do the same. Home to a cluster of ICE detention facilities, many of which are privately run, Louisiana already plays a key part in immigration enforcement. Now, the governor is taking the state’s involvement further by establishing an ICE detention center on the grounds of Louisiana’s largest prison, which houses the state’s highest-security inmates.
President Trump hinted on Wednesday that New Orleans could be the next U.S. city where he deploys National Guard troops. Last month, Invest in Louisiana and the West Virginia Center on Budget and Policy called on their governors to recall National Guard troops from Washington, D.C, saying that the use of federal troops in this manner sets a blueprint for military takeovers of cities across the country.
Number of the Day
66% – Percentage of Americans who are concerned that Covid-19 vaccines won’t be available to them. (Source: KFF Health News)