A Local Ladder For The Working Poor

The federal Earned Income Tax Credit (EITC) will increase the earnings of over 18 million low-income working families in the U.S. by more than $30 billion this year. This survey provides the first look at how the EITC, and the working poor families it benefits, are distributed in the nation's 100 largest metropolitan areas. It finds that the EITC provided a $17 billion stimulus to these metro areas in 1998, and that the majority of EITC dollars flowed to the suburbs. There were significant differences in the spatial distribution of the EITC by U.S. region, with working poor families in the Northeast and Midwest more concentrated in central cities than in the South and West. The survey concludes by describing steps that local leaders can take to boost the effectiveness of the EITC, including expanding education and outreach efforts, linking workers to low-cost tax preparation, and supporting credits at the state and local level that build on the federal EITC.