Tags: Blinder | Obama | income tax | credit

Princeton Economist Alan Blinder Lauds Obama Plan to Increase Earned Income Tax Credit

By    |   Thursday, 13 March 2014 12:33 PM

Former Federal Reserve Vice Chairman Alan Blinder supports President Barack Obama's plan to increase the earned income tax credit (EITC).

The credit is substantially more generous for workers with children than for those without, Blinder, now an economics professor at Princeton University, writes in The Wall Street Journal.

Obama seeks to double the maximum benefit for childless workers.

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"That sounds like a lot, but since childless workers now receive, on average, just 9 percent of what parents get, according to the Center on Budget and Policy Priorities, doubling their tax credit would close only a small fraction of the gap," Blinder writes.

"Yet it would double their work incentive."

Research indicates that the EITC has increased employment, Blinder says. The White House cited a recent study which calculates that the EITC has pushed about 10 percent of parents to get a job who otherwise wouldn't have done so, he says.

And it's not just Democrats who back the credit, Blinder writes. In 1986, President Ronald Reagan called it "the best anti-poverty, the best pro‐family, the best job creation measure to come out of Congress," according to the Chicago Tribune.

Alex Brill, a research fellow at the right-of-center American Enterprise Institute, also notes conservative support for broadening the credit.

"The dynamics surrounding EITC are changing," he told Bloomberg. "There's a little bit of a shift among conservatives and Republicans — an increased level of interest in issues around the working poor."

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Former Federal Reserve Vice Chairman Alan Blinder supports President Barack Obama's plan to increase the earned income tax credit (EITC).
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Thursday, 13 March 2014 12:33 PM
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