Sabine Schoenbach, Senior Associate, EITC Funders Network
Giridhar Mallya, Senior Policy Officer, Robert Wood Johnson Foundation
Three years ago, the EITC Funders Network started more deeply exploring the growing body of research on the intersections between the Earned Income Tax Credit (EITC) and health outcomes. This research became a foundation for fostering cross-sector discussions and collaborations to promote both economic opportunity and health equity.
As policymakers and advocates work to mitigate the unprecedented health and economic impacts of COVID-19, the EITC is getting increased attention as a person-centered policy that boosts essential workers’ wages, reduces poverty, and improves short- and long-term health outcomes.
We recently spoke with one of our earliest partners in this effort—Giridhar Mallya, Senior Policy Officer at the Robert Wood Johnson Foundation (RWJF)—and asked him about the growing body of research linking the EITC to health equity, policy opportunities in the wake of the unequal and devastating impacts of COVID-19, and recent bright spots and collaborative efforts in this work.
As a health funder, why is it important to invest in EITC-related work?
Health, income, and wealth are inextricably linked. Therefore, it is critical for health funders to be engaged in work that promotes the financial health of individuals and communities. Often, this manifests as investments in expanding access to health insurance, which is an essential protection against medical debt, or bolstering food and housing supports. But now is the time to go further upstream to tax policy.
While the federal tax system is relatively progressive—with higher income people paying more than lower income people—state and local tax systems are regressive. This means that people already struggling financially may be taxed further into poverty as a means of paying for vital services like education and health care.
This is where the EITC comes in. It effectively puts money back in the pocket of low- and moderate-income workers, even those with no federal income tax obligations. Decades of research demonstrate that the EITC is one of the most effective anti-poverty policies, increasing take-home income and promoting labor market entry and increasing workforce participation.
Additionally, a growing body of research is revealing the EITC’s powerful health impacts. EITC receipt is an important factor in reducing low-birthweight births and, importantly, in closing disparities in birth outcomes by race. This may be due, in part, to positive effects on mothers’ mental health and smoking during pregnancy. EITCs have also been shown to reduce food insecurity and possibly even “deaths of despair.” Over the course of a lifetime, EITCs received during childhood contribute to better health and socioeconomic outcomes in adulthood.
In this current moment, as we face a pandemic, an economic recession, and ongoing structural racism—all of which have disparate impacts on people of color—how do you see the role of the EITC?
Structural racism underlies the unequal and devastating impacts of COVID-19. Now is the time for bold action to meet people’s immediate needs; to resource BIPOC-led organizations to set agendas and pursue a new vision for our country; and to change the mindsets, systems, and policies that perpetuate inequity. EITCs can be part of this transformation toward racial and gender equity, particularly if paired with other policies such as increases in the minimum wage, and if exclusions to EITC eligibility and access are addressed.
Currently, working childless adults and undocumented immigrants are largely excluded from the EITC, driving them into—or deeper into—poverty. Expanding the value of the federal EITC for workers without dependent children during this time would generate fiscal stimulus, help avoid a spike in poverty, and boost the incomes of low-wage workers—many of whom are people of color bearing the brunt of COVID’s impact and doing this country’s essential work.
Many states will face extreme budget pressures due to pandemic-related revenue shortfalls, so adopting or expanding EITCs may be challenging. Nevertheless, state EITCs can be a key part of an anti-racist and equitable state policy response to COVID-19.
What are some recent highlights or promising practices in this work?
On the policy front, there has been significant movement in the states, often with bipartisan support. Twenty-nine states plus D.C. and Puerto Rico have now enacted state-level credits, and Colorado recently became the first state to fully expand EITC eligibility to taxpayers with Individual Taxpayer Identification Numbers (ITINs). Just a few weeks earlier, California expanded eligibility to ITIN filers who have children under six. These state actions represent a major step toward making the EITC more inclusive and impactful. More and more, states are recognizing the immense contributions that undocumented immigrants are making to their communities socially, culturally, and economically and are working toward more inclusive tax policies.
We are also seeing more health stakeholders engage in EITC research, education, and advocacy. The American Academy of Pediatrics has highlighted the importance of financial stability to children’s well-being, citing the EITC as a core social policy that can complement health care interventions. Groups like StreetCred are finding ways to connect health clinics and free tax preparers to help low-income patients apply for the EITC during tax season. With funding from RWJF, the CDC Foundation recently published its EITC Public Health Action Guide to educate public health practitioners on the benefits of EITCs and how to get involved in EITC uptake, adoption, and expansion efforts. In addition, multidisciplinary researchers are continuing to build the EITC-health evidence base, including the Institute for Women’s Policy Research and the University of California, Berkeley through the Work Family Supports and Health Research Hub.
Overall, our partners and field leaders have found that bringing health funders and practitioners into EITC advocacy coalitions brings new energy, networks, frames, and messages to the work. Such collaboration has helped move EITCs across the finish line in Massachusetts and New Mexico and has brought new policymaker champions into the fold in Georgia and Arkansas.
Some funders might not be ready to invest in advocacy, butthere are many other ways to contribute to this effort, including raising awareness, funding additional research, and supporting free tax preparation. The EITC is just too important to overlook.
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