New Report Recommends States Enact, Expand EITC to Advance Social Justice

By Lauren Pescatore

A new study measuring equity across all 50 states finds that those in the Gulf South rank below average and recommends enacting and expanding state-level Earned Income Tax Credits (EITCs) as one of several ways to advance social justice.

Loyola University New Orleans’ Jesuit Social Research Institute’s JustSouth Index evaluates levels of equity across states using three measures: poverty, racial disparity and immigrant exclusion. Across all three categories, the Gulf South states – defined by the report’s authors as Alabama, Florida, Louisiana, Mississippi and Texas – ranked among the lowest in the nation. Among these states, only Louisiana offers a state-level EITC, and for a very small amount: 3.5 percent of the federal credit. By comparison, Vermont, the top-ranked state on the list, offers an EITC worth nearly one-third (32 percent) of the federal credit.

The report points to stagnant wages and rising costs of living as key factors perpetuating economic inequality in the Gulf South and other states, trapping a class of “working poor” Americans who cannot earn enough to cover basic expenses and save for unexpected emergencies.

As one possible action step, the authors recommend that states enact EITCs or improve existing credits to build a pathway out of poverty for those with low incomes. State-level EITCs “generally have bipartisan support, are easy to administer, and nearly every dollar a state spends on its EITC program goes to working families who need help,” the report concludes. “By allowing low-income workers to keep more of what they earn, EITC programs increase family economic security and encourage the lowest-earning households to remain in the work force and work more hours.”

The full report is available here: