For Economic Stabilization Amidst Suburban Poverty: Maximize the Earned Income Tax Credit

Natalie Holmes and Alan Berube explains some of the implications of a shifting geography of poverty—from urban to suburban—and its connections to the federal Earned Income Tax Credit (EITC). Now that the geography of poverty is shifting, according to the article, so too will the role of the EITC. Moreover, the article also explains "how expanding participation in the program and paying the credit differently could enhance its effectiveness as a local economic stabilizer."

The article establishes the historical context for the War on Poverty, dating back to 1964, when poverty was mostly urban and rural. Poverty in suburban settings, however, will make place-based initiatives harder to achieve. Therefore, direct investments in low-income individuals, such as the EITC, will become more important.

That's not to say that the EITC fails to benefit a broader definition of community, according to the post. California State University researchers cited in the article found evidence that "the credit creates local economic impacts equivalent to at least twice the amount of EITC dollars received" in California counties. Other examples of the community and multi-generational benefits of the EITC are included in the article.

The article concludes with additional recommendations for how to maximize the EITC as an anti-poverty tool in suburban settings.