Today, Senators Dick Durbin (D-IL) and Sherrod Brown (D-OH) introduced legislation that will not only extend the Earned Income Tax Credit, but will also expand its eligibility. Both men are keen on the idea:
“Enhancing the earned income tax credit should be a bipartisan goal, as President Reagan called EITC the most effective tool in fighting poverty,” Brown said in a statement. “We need to reward Americans who work hard and play by the rules and ensure that they can work and continue to take care of their families.”
“This bill is pro-family, pro-work legislation that would permanently extend critical refundable tax credit provisions that have helped lift millions of working families out of poverty,” Durbin added.
Pro-family! Pro-work! Those sound like pretty good things and lots of other people think so too. The Hill reports that two dozen other members of Congress have signed onto the legislation including Finance Committee Chairman Max Baucus.
However, as you may or may not be aware, the EITC has some problems; Chris Bergin wrote about it just yesterday:
The EITC program leaks like a sieve. More bluntly and honestly stated, well-intentioned as it may be, the EITC has been corrupted. Don’t take my word for it. Recently, the Treasury Inspector General for Tax Administration released a report stating that up to one-quarter of EITC payments made in fiscal 2012 were improper. How much does that represent? Try $13.6 billion. In one year. Using a ten-year budget window, that’s $136 billion, and that’s just the tainted stuff.
Now, check me if I'm misguided here, but if one-quarter of a refundable (i.e. checks get cut) tax credit is improper, then expanding it might not be the thing to do. But maybe this is one of those GEFGW sorta things and everyone is cool with a 75% success rate? If so, tell me. I'll recalibrate my expectations if necessary.