Intergenerational Policies like EITC, CTC Should Be Expanded to Reduce Poverty, Report Says
September 20, 2021Print
By Katrina Schmidt
A recent brief from the Center for American Progress (CAP) calls for policymakers to implement intergenerational approaches to alleviating poverty, including expanding refundable tax credits like the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). The issue brief sharply criticizes American policy choices that fail to effectively reduce poverty, primarily by neglecting to properly target interventions to people who face simultaneous hardships and structural barriers to economic opportunity.
The brief by Arohi Pathak, director of policy for the Poverty to Prosperity program at CAP, is part of the think tank’s series on policies that reduce poverty across generations, resulting in greater family stability and income security. It outlines the federal, state, local and private sector funding streams that can support multigenerational programs and describes what a whole-family approach to poverty alleviation would look like. While many of these programs already exist, they should be better targeted through intersectional frameworks to address unique needs. Holistic poverty alleviation strategies should be able to reach everyone, from infancy to retirement.
“As a nation, we know how to address poverty, and policymakers have a host of program solutions and interventions to effectively alleviate poverty, including early education, the earned income tax credit (EITC), Supplemental Nutrition Assistance Program (SNAP), housing vouchers, and Medicaid,” Pathak writes.
The report specifically recommends modernizing and automizing safety net programs, particularly in times of crisis; continuing investments in family stability supports; creating jobs with high wages and benefits; and taking measures that address racial inequities in policy and public institutions.
Refundable tax credits for low- and moderate-income workers, like the EITC and CTC, supplement family incomes without strings attached, supporting families in building long-term financial stability that meets their needs. The EITC and CTC are particularly effective at alleviating poverty and reducing racial disparities, the report notes, making them critical tools in the cross-generational fight to eradicate systemic challenges that exacerbate poverty.
In particular, tax credits for children like the CTC and Child and Dependent Care Tax Credit (CDCTC) are key in supporting women who have been especially hurt by the pandemic. The COVID-19 recession caused women’s labor force participation to fall to its lowest levels since 1988, with mothers and women of color hardest-hit. The CTC and CDCTC can help support women with children as they return to work or continue to provide childcare at home.