Federal EITC Expansion Would Benefit Thousands of Workers in Every Major Metro Area

By Lauren Pescatore

We blogged last week about how President Obama isn’t alone in wanting to expand the federal Earned Income Tax Credit (EITC). Representative O’Neal (D-MA), Representative Rangel (D-NY) and Senator Brown (D-OH) have also introduced separate bills to improve the federal credit.

Now, new data from the Brookings Institution’s MetroTax model shows that 14.1 million taxpayers would benefit from the President’s proposal, and 15.2 taxpayers from the Brown, Durbin and Neal proposal. Under either of these proposals, 61 percent of the workers who would benefit from the stronger EITC live in the nation’s 100 largest metro areas. Within these metro areas, the expansions would increase EITC benefits for nearly 4.7 million workers who are already eligible for the credit, while expanding eligibility to up to 4.6 million more workers.

Workers in all 50 states would benefit from any expansion to the federal EITC, but the Brookings data also shows that a number of states could more than double their number of childless workers eligible for the credit. Fifteen states could see their number of childless worker EITC recipients double if the President’s proposal is enacted, and as many as 35 states could double their number of recipients under Senator Brown’s and Representative Neal’s legislation.

Detailed data on the potential impact of these proposals at both the state level and by metro area is available in the appendices Brookings provided here.