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EITC has a massive downside that you're ignoring. The ability of municipalities to act as laboratories in social policy is essential to effective governance. Se

by greedo 9y ago

EITC has a massive downside that you're ignoring. The ability of municipalities to act as laboratories in social policy is essential to effective governance. Seattle can raise their minimum wage far easier than having Congress change the Federal minimum wage. And then we can see how it works in Seattle. Expanding EITC has a huge affect, and is both harder to enact, and if needed, harder to rollback.

davidw 9y ago
The minimum wage affects both high school students looking for some extra cash, and people desperately trying to support a family. The latter is where an effective policy would concentrate its help. I'm not sure what the best answer is.
TimJYoung 9y ago
That's absolutely true for most new Federal economic/tax policies that are relatively untested. But, the EITC has been around since the mid-to-late 70s. We've got loads of data on its effects under all sorts of different economic scenarios, some of which are included here: http://www.epi.org/publication/ib370-earned-income-tax-credit-and-the-child-tax-credit-history-purpose-goals-and-effectiveness/ http://www.epi.org/publication/ib370-earned-income-tax-credi...
- greedo 9y ago
  So Federal Income tax is a relatively old tax policy, weighing in at a hearty 104 years of age. And modifying it and understanding the ramifications of changes to the tax code is easy? We have a congressional shitstorm whenever either party wants to raise or lower taxes. And the old adage about getting three answers when you ask two economists what'll happen is still true, even discounting ideological baggage.
humanrebar 9y ago
I agree that federalism has important benefits we shouldn't ignore, but income tax schemes can be (and are) implemented at various levels of government.
- edoceo 9y ago
  In Washington State, no personal income tax. Businesses pay tax on income but natural persons do not.
  - humanrebar 9y ago
    Then use a minimum income scheme instead. The point is that it's better to improve incomes by supplementing incomes, not by restricting other things.

by greedo 9y ago

davidw 9y ago

The minimum wage affects both high school students looking for some extra cash, and people desperately trying to support a family. The latter is where an effective policy would concentrate its help. I'm not sure what the best answer is.

TimJYoung 9y ago

That's absolutely true for most new Federal economic/tax policies that are relatively untested. But, the EITC has been around since the mid-to-late 70s. We've got loads of data on its effects under all sorts of different economic scenarios, some of which are included here: http://www.epi.org/publication/ib370-earned-income-tax-credit-and-the-child-tax-credit-history-purpose-goals-and-effectiveness/ http://www.epi.org/publication/ib370-earned-income-tax-credi...

greedo 9y ago
So Federal Income tax is a relatively old tax policy, weighing in at a hearty 104 years of age. And modifying it and understanding the ramifications of changes to the tax code is easy? We have a congressional shitstorm whenever either party wants to raise or lower taxes. And the old adage about getting three answers when you ask two economists what'll happen is still true, even discounting ideological baggage.

humanrebar 9y ago

I agree that federalism has important benefits we shouldn't ignore, but income tax schemes can be (and are) implemented at various levels of government.

edoceo 9y ago
In Washington State, no personal income tax. Businesses pay tax on income but natural persons do not.
- humanrebar 9y ago
  Then use a minimum income scheme instead. The point is that it's better to improve incomes by supplementing incomes, not by restricting other things.