The Earned Income Tax Credit: Analysis and Proposals for Reform
The Earned Income Tax Credit (EITC) was originally enacted in 1975, in the wake of the failure of President Nixon’s proposed Family Assistance Plan. Although it began as a temporary and limited alternative to President Nixon’s proposal, the EITC has, in the years since, been made permanent and been reﬁned and expanded. In 1986, the EITC was a critical reason why President Reagan could proclaim that the Tax Reform Act took millions of working poor off the income tax rolls, and there were important further expansions in 1990 and 1993. Further, the EITC has been amended several times to address noncompliance problems and to try to simplify the ﬁling process, and the IRS has undertaken programs of enhanced enforcement and expanded outreach to educate potentially eligible taxpayers about the credit. In addition, since 1997, the EITC has been complemented by a Child Tax credit that provides additional beneﬁts to many families.