We all agree that people should work hard, and that should be enough to pay their bills. But the fact is that many low-wage workers don’t earn enough to cover basic necessities like groceries, rent, transportation, child care and health care.
United Way of Treasure Valley fights for the health, education and financial stability of every person in our community, which includes advocating for the Earned Income Tax Credit (EITC). This sensible tax credit helps about 124,000 working Idahoans keep more of their hard-earned money so they can cover basic expenses without relying on public assistance.
To be eligible for the EITC, recipients have to work. They are home health aides, farm workers, teaching assistants, janitors, cashiers and other low-wage workers. Many recipients are also military families and returning veterans, who rely on the EITC to supplement their transition into the civilian workforce.
The EITC is one of the country’s most successful anti-poverty programs, lifting roughly six million people, including three million children, out of poverty each year. By reducing poverty and increasing income for working families, the EITC has been linked to better health — especially for infants and mothers — and better test scores and achievement for students. “The most recent relevant study found that a $1,000 increase in the EITC led to a 7.3 percentage point increase in employment.” (source)
Economic boosters like the EITC ensure that average Idahoans have enough money to keep up the basic spending our economy depends on. For every EITC dollar a recipient earns, they return $1.50 to $2.00 to the local economy, paying for basic needs like food or a down payment on a more reliable car to get to work. That’s good for everyone in our community.
The business community supports the EITC, and not just because it gives working families more spending power. The EITC increases workforce participation and encourages low-wage workers to get additional education or training to boost their employability by incentivizing them to move up the economic ladder.
James of Nampa is a great example. After he and his wife had their first child, they were struggling to make ends meet even though James worked two part-time jobs. With a busy schedule and a limited paycheck, James was forced to ride a bike to school, work, his internship and the grocery store, often pedaling home to his family at 7:00 or 8:00 at night. Thanks to the EITC, James was able to save up enough money to buy a car.
We all agree that people should work hard, and the EITC makes it just a little easier for people like James to make ends meet and take care of their families.
But while the EITC is one of the most effective tools we have to help working families keep their heads above water, it currently excludes millions of workers. Workers not raising children at home receive too small a credit to experience a stabilizing effect, and workers 21-24 (not raising children at home) are completely ineligible.
More than 5 million American workers in this group are actually taxed into poverty, largely because they are excluded from the pro-work, anti-poverty impacts of the EITC.
Today, over 55 United Way leaders from around the country, including one of our own team members from United Way of Treasure Valley, are meeting with lawmakers on Capitol Hill to educate them about the incredible impact of the EITC, and to make the case for the credit’s expansion. United Way of Treasure Valley is proud to be part of the effort by representing hard-working Idahoans who would benefit from the EITC. Tune into our Instagram channel all day for photos and story updates from Capitol Hill!
Please join us by emailing your Member of Congress about this important issue.