Despite EITC upsides, it fails to resolve racial and gender wealth inequities – multiple warrants

[Jhumpa, “Exploring Guaranteed Income Through A Racial And Gender Justice Lens,” Roosevelt Institute, June 2019 https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI_UBI-Racial-Gender-Justice-brief-201906.pdf, accessed June 26, 2023, GDS-LL]

It is difficult to ascertain how EITC expansion on its own can address racial and gender wealth inequities. It is true that a large percentage of those who will qualify for the expansion are families of color. However, the amount of the credit along with the fact that the credit will most likely be used to cover basic life expenses point to the conclusion that while EITC expansion is greatly needed, it will probably not make a dent in curbing racial or gender wealth inequities. A larger benefit needs to be considered in order to help those with little to no wealth to actually begin accumulating wealth.

Another drawback to the EITC is that it also excludes those who may not be a part of the federal tax system. There are many people who choose not to file taxes for numerous reasons. For example, many workers are part of the informal economy, including those who have been formerly incarcerated and can’t find traditional work due to employer discrimination as well as people who cannot afford to have their paychecks garnished by the government to pay off unjust criminal justice debt. Also, about half of our undocumented population don’t file or pay federal income taxes as many live in constant fear of interacting with the government in any way (Campbell 2017). For these reasons, EITC expansion should be considered a great tool to alleviate abject poverty, but it does not take us far in the discussion of racial and gender wealth equity.