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EITC Insufficient

Perm the alt. The EITC is not an exclusive program and has inconclusive results.

Guy Sorman, 2011. Why Not a Negative Income Tax? - Replace the welfare state with a cash subsidy for the poor.

The EITC may resemble Friedmans idea superficially, but it is quite different. It doesnt replace any welfare programs; instead, it adds another layer to them, utterly failing to reduce government bureaucracy. And though it is a cash payment, as Friedman would have suggested, it goes only to the working poor; the unemployed continue to receive in-kind support, such as food stamps. The rationale behind this distinction between the working and nonworking poor is that the tax credit is supposedly an incentive to workthat is, if you work, you get a credit to supplement your wages, but if you stop working, you lose both your wages and the credit. Studies of the EITC, however, have been inconclusive. Employed single mothers do seem inclined to keep working once they receive the tax credit, instead of turning to welfare; married women, by contrast, sometimes stop working once their husbands get the credit on top of their salaries. The alleged incentive to work is thus not a decisive reason to keep the EITC.


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