Why the Earned Income Tax Credit Beats the Minimum Wage

While the Earned Income Tax Credit is hardly perfect—among other flaws, it is too complex, and imposes high marginal tax rates and marriage penalties on certain recipients—it remains a better vehicle for fighting poverty than the minimum wage. Most minimum-wage workers come from non-poor households, and raising the federal minimum from $7.25 to $10.10 an hour, as Democrats have proposed, “would reduce total employment by about 500,000 workers,” according to the Congressional Budget Office. Rather than jeopardize hundreds of thousands of jobs, Congress should reform and expand the EITC instead.

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