Former White House National Economic Advisor Proposes an “EITC for All”

By Devin Simpson

Gene Sperling, the former national economic advisor to Presidents Clinton and Obama, believes true tax relief for American workers should include an expansion of the EITC for workers without dependent children, a group that has been overlooked in past EITC expansions.

Writing in The Atlantic, Sperling proposed an “EITC for All,” which would increase the benefit for childless workers, lower the EITC qualifying age from 25 to 21 and expand the credit amount to provide a 30 percent boost for the first $10,000 of income.

Currently, a family of three can receive a maximum EITC of $6,318, while workers without dependent children can receive at most a $510 credit. According to the Center on Budget and Policy Priorities, workers without dependent children are the lone group taxed into poverty, largely due to the low credit they receive.

Sperling outlines several reasons why an expansion is necessary. He notes that an EITC for All would benefit far more than young, single male workers without dependent children – typically the focus of policymaker efforts to expand the EITC. Instead, Sperling argues that this group encompasses single women without children, workers with disabilities and working parents over 45 with adult children who can no longer be claimed as dependents. Sperling says these older workers would account for about one-third of Americans who would benefit from the EITC expansion.

The proposal’s impact on poverty could be profound, according to Sperling.  “More than 7 million childless adults are currently taxed into poverty by the federal tax system, primarily because of the inadequacy of the EITC for this group.” Increasing the credit for this group, would officially end the era of workers being taxed into poverty, he argues.

Sperling suggests that an EITC for All proposal could either stand on its own or be part of a larger effort such as  the Grow American Incomes Now (GAIN) Act, introduced by Sen. Sherrod Brown (D-OH) and Rep. Ro Khanna (D-CA). That proposal would increase the credit for workers without dependent children to $3,000 and lower the qualifying age from 25 to 21.

Sperling also encourages states to enact their own EITC for All plans to help workers until federal legislation is enacted.

To learn more about the EITC for workers without dependent children, click here.