Administrative Burden

The EITC has reduced income insecurity for many of the poorest Americans. In 2014, the national poverty rate was 15 percent. Without the EITC (along with the refundable portion of the child tax credit), the poverty rate would have been more than 18 percent. The effect on children is even higher—without these tax credits, the child poverty rate would be a third higher, 24 percent rather than 18 percent. 13 Every $ 1,000 increase in the EITC benefits leads to 9 percentage point reduction in poverty among the poorest families. 14 A growing literature suggests that by supplementing the income of the poor, the EITC also has measurable effects on child health, cognitive abilities, and educational performance. 15