As President Obama releases his report urging the expansion of the earned income tax credit (EITC), he cites Hamilton Project expert John Karl Scholz's proposal to expand the EITC to apply to childless, low-wage workers in economically depressed areas.
Scholz has done extensive research focusing on the expansion of EITC, the return of low-skill workers to the labor force and low-income families. In his Hamilton Project paper, Scholz proposes a two-part policy to address interrelated problems of many low-income, distressed communities which are faced with high unemployment rates, high incarceration rates of low-skilled men, and a growing fraction of children being raised in single-parent households. Scholz suggests that expanding the EITC for childless, low-wage workers will have similar positive outcomes as seen for low-income families with children. Sholz’s proposal also targets wage subsidy for low-wage workers, “whereby the federal government would pay subsidies of 50 percent of the difference between the worker’s market wage and a target wage of $11.30 per hour.”
For details on how Scholz would implement an expansion of the EITC click here>>