The one piece of this country’s social safety net that Ronald Reagan embraced was the Earned Income Tax Credit (EITC). As part of his 1986 Tax Reform Act, he proposed and signed a major expansion of this anti-poverty initiative. To demonstrate how extremist the current GOP has become, they are trying to cripple it.
Never accuse Republicans of being uncreative. Once again, they’ve found an innovative way to punish the poor and simultaneously increase budget deficits — all with one nifty trick!
To pull off this impressive twofer, they would put every American applying for the earned-income tax credit (EITC) through a sort of mini-audit before getting their refund. This would both place huge new burdens on the working poor and divert scarce Internal Revenue Service resources away from other audit targets, such as big corporations, that offer a much higher return on investment.
I have to admit that it is hard for me to comprehend a rationale for doing something like this. But the cynic in me thinks that last part might play a big role—diverting IRS resources away from the wealthy and big corporations. It also adds to the Republican narrative about “those people” abusing government programs.
In actuality, the EITC has been proven to be one of the most effective anti-poverty programs this country has ever instituted. Last year Anne Kim provided this chart from the Census Bureau’s Supplemental Poverty Measure.
Second only to Social Security in terms of impact, programs like the EITC affected 9.2 million individuals in 2015 and lowered the poverty rate by almost three percent.
For years now Democrats have been fighting back attempts by Republicans to undermine social safety net programs like unemployment insurance, TANF (cash welfare payments) and SNAP (food stamps). More recent efforts have been directed against SSI (Supplemental Social Security for people with disabilities) and school lunch programs. Now they are looking at ways to undermine EITC.
Interestingly enough, House Speaker Paul Ryan has actually supported EITC in the past and proposed expanding it to childless adults. But when he released his 35-page brief on “A Better Way” to fight poverty in June 2016, it was hardly mentioned except for one line about increasing it. The document goes on at length about EITC fraud—a set-up for this recent action.
The thing to keep in mind about all of this is that no president did more to dismantle the social safety net in this country than Ronald Reagan. When Republicans part ways with their most beloved hero to become even more extreme in their approach, it is past time to recognize that, as the saying goes, this is not your father’s GOP.