By: Juan Tirado

A new report offers recommendations for reforming the Massachusetts Earned Income Tax Credit (EITC) to provide a guaranteed basic income for low-wage workers.

A Guaranteed Income for Massachusetts” outlines key reforms to the state credit to provide families earning up to $70,000 with a cash credit of at least $1,200 a year. The report recommends increasing the credit’s value from 30 to 50 percent of the federal EITC, increasing the credit’s income eligibility to include households earning up to $75,000, expanding eligibility to previously excluded groups (e.g., unpaid caregivers, immigrants who pay taxes with an Individual Taxpayer Identification Number); and increasing the impact of the EITC by expanding access to free tax preparation services and providing more frequent payments.

The report, written in partnership by Boston Indicators, Massachusetts Budget and Policy Center, and the Economic Security Project, seeks to combat the growing income inequality facing low-wage workers in the state. Report authors assert that these reforms will address a legacy of economic exclusion and structural racism by extending the new cash assistance to an additional 906,000 Massachusetts residents. On a recent webinar to unveil the report, Natalie Foster from the Economic Security Project said, “The idea of a guaranteed income is simply an income floor through which no one can fall. In a better economy, it ensures that we don’t leave anyone behind and in an economic downturn, like the one we’re in today, it serves as a literal lifeline for tens of millions of people…By guaranteeing an income with no strings attached, it challenges the very notion of deservedness, an idea that has held policymaking back for decades.”

The report encourages Massachusetts to build on the momentum of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and help rebalance its economy in the wake of the COVID-19 pandemic. According to report authors, by using the EITC’s existing framework, Massachusetts can start building a more balanced, resilient economy for the long term through a guaranteed income. This would stimulate the local economy and help families make ends meet, save for emergencies or future goals, increase their health and well-being, improve educational outcomes, and ultimately keep them out of poverty.

Read the full report here.