Earned Income Tax

In the endeavor of increasing income equality, multiple laws, regulations and tax credits have been effectuated. For a period of three decades, economists have advocated the use of a tax system for this purpose. For example, transferring the responsibility to a tax system such as Earned Income Tax Credit (EITC) has been proven to be more efficient than other methods, such as the welfare system. The welfare system has not been completely transferred to a more efficient tax system due to political reasons, not fiscal. Still, since 1975, after a debate over Nixon’s Family Assistance Plan (FAP), the EITC has been in functionality. The two main reasons why the financial booster has been proven to work are: only tax payers who work can be eligible for the EITC, and the EITC’s income transfer is usually received as part of a taxpayer’s annual tax refund. The first advantage has increased the labor force participation, especially among single …show more content…
President Obama has supported an increase in the minimum wage, but even strong supporters of that measure don 't expect it to get past Washington 's political gridlock. “I don 't think anything is going to pass Congress this year,” says Lawrence Michel of the Economic Policy Institute in 2013. Senator Tom Harkin introduced The Fair Minimum Wage Act of 2013 (FMWA) on March 05. The act would not only would it increase the minimum wage from $7.25 to $10.10, the proposal would also raise the subminimum wage paid to those who also receive tips, which has been frozen at $2.13 for over two decades. The Bureau of Labor Statistics released information in 2013, proving that polls show a majority of Americans in support of the idea. Since the year 2009, low-wage workers captured national media attention with protests at retailers and fast food outlets such as: Macy 's, Sears, Wal-Mart, Dunkin ' Donuts, McDonald 's, and