About Half of EITC, CDCTC Beneficiaries Don’t Realize They Have Used a Government Social Program
May 9th, 2011
According to a recent Perspectives on Politics study, about half of working families receiving the Earned Income Tax Credit (EITC), and the Child and Dependent Care Tax Credit (CDCTC) claimed that they have not used a government social program. Coining the term “the submerged state,” the study reveals that these working family tax credits are among the government policies and programs, tax incentives and subsidies that slip from public view.
The study found that 47.1 percent of EITC recipients and 57.1 percent of CDCTC recipients reported that they had not used a government social program. Perhaps one of the reasons that this percentage is so high is because tax credits like the EITC and CDCTC are less stigmatized than traditional government social programs, and recipients may not consider tax-based supports as being under the same umbrella as more traditional social support programs.
For instance, only 25.4 percent of food stamp beneficiaries and 27.4 percent of welfare/government assistance beneficiaries did not realize they had used a government program, but a majority of beneficiaries of less traditional government social programs such as federal student loans (53.3 percent), Hope or Lifetime Learning tax credits (59.6 percent), and home mortgage interest deductions (60 percent) claimed they had not used a government social program.
Although recipients may be more likely to report utilizing more traditional government social programs than tax-based supports, it would be incorrect to assume that they reach more families or that the benefits of these programs have a greater impact. In fact, the IRS finds that the federal EITC lifts 6.6 million Americans, including 3.3 million children out of poverty each year, making it the nation’s largest and most successful anti-poverty program.
This lack of recognition that tax credits are government programs is a two-edged sword. The lack of stigma increases the likelihood that eligible people will take advantage of the programs. At the same time, when recipients don’t connect these programs with the government, they also fail to understand that efforts to cut government spending will reduce their access to the programs they rely on. And that means that often, they don’t recognize the need to speak up to protect and expand these programs.
Posted in Child and Dependent Care Tax Credit, Earned Income Tax Credit, Federal, Recent Updates | No Comments »
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