Hike in state’s EITC would lift countless families out of poverty

By Roy Lincoln Karp
Special to the Reporter

Folk wisdom tells us that “an ounce of prevention is worth a pound of cure,” but we often forget this adage when addressing systemic challenges. We pour billions of dollars into the development of new miracle drugs and medical procedures, but spend comparatively little on preventative medicine or addressing social issues that contribute to chronic disease. Maybe it’s human nature, but we seem to be better at reacting to crises than proactively working to prevent them.

One notable exception is the Earned Income Tax Credit, long considered one of the nation’s most effective public policies for addressing poverty. First signed into law by President Gerald Ford in 1975, the federal EITC is a refundable tax credit for low- and moderate-income working people. Since then, it has been sustained and increased with bipartisan support. Liberals like it because it’s a progressive tax policy in an otherwise regressive system; conservatives support it because it rewards those in the workforce.

EITC has helped lift millions of working Americans and their children out of poverty. Because of its proven track record, 29 states have also enacted their own state EITCs to supplement the federal credit. Massachusetts created an EITC in 1997 and in 2017 it was increased to 30 percent of the federal credit with support from Democratic and Republican lawmakers and Governor Charlie Baker.

Now the Healthy Families EITC Coalition, a statewide alliance of “advocates working to improve the health and well-being of Massachusetts children and families” is seeking to increase the state EITC to 50 percent of the federal refund, expand access to immigrants with Individual Tax Identification Numbers, and provide additional funding for Volunteer Income Tax Assistance (VITA) sites, which give free tax preparation assistance to low-income residents.

Under current law, a working adult earning up to $46,000 annually with two dependent children receives a maximum federal refund of almost $6,000 and an additional $1,750 from the state. The increase from 30 percent to 50 percent would give them an additional $1,250. This boost can make a huge difference for low-income working families struggling to cover the basic necessities. The increase alone could pay heating costs for an entire winter, four months of groceries, or three months of full-time child care.

“EITC is incredibly helpful for our families,” explains Carlos Moreno, senior coordinator of the Mobility Mentoring Center at EMPath, a non-profit organization that is part of the EITC Coalition. EMPath operates three temporary housing shelters and connects participants to program mentors and specialists who help them find stable housing, jobs, and daycare for their children.

As Moreno explains, the refund often helps recipients pay outstanding bills and clean up their credit report, which in turn helps them access permanent housing and get a job. “It can change the entire trajectory of a family that has never had any savings and has had to live paycheck to paycheck.” It can also be the first step toward saving for a child’s education.

One of EMPAth’s participants, R. Gardner of Mattapan, went to Boston Latin Academy and earned her B.A. in psychology at UMass Boston. After graduating, she found it difficult to find adequate employment in a field that often requires a master’s degree or higher. She faced further challenges after having premature twins with medical issues and numerous hospitalizations. Gardner plans to use her tax credit to reduce student loan debt and “get back on my feet.”

Hers is just one story out of thousands. If Massachusetts were to increase the state EITC to 50 percent, it is estimated that 20,000 additional children and their families would be lifted out of poverty every year. That is proactive problem-solving that would have positive benefits for working families and our entire economy. It’s an ounce of prevention that is worth a pound of cure for our working neighbors.