Suggestions for Supporting Work

I think there are two goals that just about everyone can agree on — encouraging work and reducing poverty, says host Mary Walden. Now I understand that leaders from across the political spectrum may be coming together on a plan to do both, she says. “What is it?” she asks her husband, N.C. State University economist Mike Walden.

Mike Walden: Well, Mary, this plan actually is to take an existing federal program (that perhaps is not widely understood) and expand it.  The program is called the Earned Income Tax Credit. It works really like a negative income tax in that if you meet certain income standards, particularly being low-income when you file your income taxes in April, not only will you get back everything that you’ve paid in in terms of withholding of income taxes, but you’ll get back extra money. So that’ll be the time you’ll get not only a big refund check but also additional support. This is a program that’s been around for decades, and many think that it’s been a very successful program. Now, however, it is a program primarily limited to low-income families who are earners and have children. The proposal is to expand it to include all low-income households, even households where there are not dependent children. Also, there’s a proposal to make it more generous. Now, we’ve had a detailed proposal on these lines from the Obama Administration. We also have some senators from the Republican Party who are also interested in this. So this may be an example, Mary. We’ll have to wait and see where we do get the true bi-partisanship to take a program that appears to be successful and try to make it even more successful.