One of things I've been thinking about lately is the heated minimum wage debate. Should we raise it or should we not? And one of the things I noticed when looking into this further is that although raising the minimum wage would definitely increase the incomes of lower wage workers, it would also create some unintended consequences such as putting smaller businesses who can't afford to pay the higher wages out of business, an increase in unemployment, and inflation.
Thinking so then what's the solution, I decided to research a little bit. And one policy tool I came across that has not been mentioned by anyone I talk to is Earned Income Tax Credit. For the tax year of 2018, if you're a single with zero children that made less than $15,270 (in adjusted gross income), you're eligible for up to $519 in tax credit.
Well, what if instead of constantly raising the minimum wage, we instead looked into expanding Earned Income Tax Credit so that more lower wage workers can keep more of their income? I mean as someone who's more politically left leaning, it would definitely make sense to me for two reasons:
- It would reduce the amount of taxes on the poor.
- It would allow for the current minimum wage we have to become a more livable wage.
More on EITC here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-income-limits-maximum-credit-amounts
One of things I've been thinking about lately is the heated minimum wage debate. Should we raise it or should we not? And one of the things I noticed when looking into this further is that although raising the minimum wage would definitely increase the incomes of lower wage workers, it would also create some unintended consequences such as putting smaller businesses who can't afford to pay the higher wages out of business, an increase in unemployment, and inflation.
Thinking so then what's the solution, I decided to research a little bit. And one policy tool I came across that has not been mentioned by anyone I talk to is Earned Income Tax Credit. For the tax year of 2018, if you're a single with zero children that made less than $15,270 (in adjusted gross income), you're eligible for up to $519 in tax credit.
Well, what if instead of constantly raising the minimum wage, we instead looked into expanding Earned Income Tax Credit so that more lower wage workers can keep more of their income? I mean as someone who's more politically left leaning, it would definitely make sense to me for two reasons:
1. It would reduce the amount of taxes on the poor.
2. It would allow for the current minimum wage we have to become a more livable wage.
More on EITC here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-income-limits-maximum-credit-amounts
(post is archived)