Death Just as Certain, Taxes More So for Childless

Your Money: Tax credit little help to childless

Most of the nearly $44 billion in total payments for 2006 went to struggling families with children. But nearly one in five people who get the credit have no qualifying children, and there's growing concern that these taxpayers aren't getting their fair share.

Childless workers – both single and married – received just more than $1 billion for 2006, or only 2.4 percent of program spending, according to the Center on Budget and Policy Priorities, a research center for social-welfare issues.

This year, single and married workers with no qualifying children can get maximum credits of only $428. Those with one child can receive up to $2,853 and workers with two or more children can get up to $4,716.

These payment disparities make it harder for the tax credit to lift workers without children out of poverty and provide little incentive for them to find jobs, both of which are primary goals of the program.

Boost in tax credit sought for childless poor

Childless workers — both single and married — received just more than $1 billion for 2006, or only 2.4 percent of program spending, according to the Center on Budget and Policy Priorities, a research center for social-welfare issues.
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House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, has introduced a broad tax-restructuring bill, HR 3970, that would double the maximum earned credit for childless workers next year and increase the income level at which the credit begins to phase out.

Rangel said the current $427 maximum was unfair, considering that childless workers were the only taxpayers who must pay federal income taxes even when their incomes fall below the federal poverty line.

The push for change is long overdue, many experts said, because work-force participation rates for less-educated men have been falling for decades, while rates for similarly educated women have increased. A more robust tax credit might help reverse that trend for men.

“It’s certainly time to re-examine the earned income tax credit,” said Michael Graetz, a Yale University law professor and tax-policy expert. “I think you can fairly ask the question whether or not it’s not outdated in terms of being so small for people without children.”

That sentiment, however, is hardly unanimous.
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“Why should we give an (enhanced) income supplement to a strapping 24-year-old male working at a construction site as a helper? It seems to me to be going beyond the intention” of the credit, Hodge said.

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