The Broken Safety Net: A Study of Earned Income Tax Credit Recipients and a Proposal for Repair

Sara Sternberg Greene

Duke University School of Law

August 22, 2012

New York University Law Review, May 2013
Duke Law School Public Law & Legal Theory Series

The Earned Income Tax Credit (EITC) is the largest federal antipoverty program in the United States and garners almost universal bipartisan support from politicians, legal scholars, and other commentators. However, assessments of the EITC missed an imperative perspective: that of EITC recipients themselves. Past work relies on largely unconfirmed assumptions about the behaviors and needs of low-income families. This Article provides a novel assessment of the EITC based on original data obtained directly from 194 EITC recipients through in-depth qualitative interviews. The findings are troubling: They show that while the EITC has important advantages over welfare, which it has largely replaced, it fails as a safety net for low-income families. The problem is that the EITC provides a large windfall to families only once per year, during tax refund season. However, low-income families are particularly vulnerable to financial shocks and instability. Not surprisingly, such events rarely coincide with tax refund season. Without a fix, the EITC leaves many families on the brink of financial collapse. In the years to come, many more low-income families may file for bankruptcy or become homeless. Despite this grim outlook, this Article suggests a straightforward and promising new way to distribute the EITC that maintains the program’s advantages while also providing a more secure safety net for low-income families in times of financial shock and instability.

Number of Pages in PDF File: 74

Keywords: Earned Income Tax Credit, EITC, Credit Cards

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Date posted: August 23, 2012 ; Last revised: July 27, 2015

Suggested Citation

Greene, Sara Sternberg, The Broken Safety Net: A Study of Earned Income Tax Credit Recipients and a Proposal for Repair (August 22, 2012). New York University Law Review, May 2013; Duke Law School Public Law & Legal Theory Series. Available at SSRN: http://ssrn.com/abstract=2134578

Contact Information

Sara Sternberg Greene (Contact Author)
Duke University School of Law ( email )
210 Science Drive
Box 90362
Durham, NC 27708
United States

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