Open my pantry door and my cats come running, expecting a treat. Mention an increase in the minimum wage, and conservatives will tell you how much they love the EITC.
As I’ve stressed in many places, this is a non-sequitur. It makes no sense to compare an increase in one policy (minimum wage), with the existence of another policy (the EITC). You have to propose an increase in the latter. (I’ve also stressed that the policies are complements, not substitutes.)
So what is Rep. Dave Camp up to by proposing a significant scaling back of the EITC in his new tax plan? Under current policy, the maximum credit for a working parent with two kids is around $5,500 and that’s about what would accrue, e.g., to a single mom working full-time at the minimum wage. But according to analysis by my CBPP colleagues, by the time his plan is fully phased in, she’d lose something like a whopping $2,000 compared to current policy, the equivalent of cutting her wage by $1 per hour (this includes Camp’s proposed changes to both the EITC and the Child Tax Credit).
So, here’s the Republican tax plan for helping low-wage workers: no increase in the minimum wage and a sharply reduced EITC. Like I said yesterday, there’s parts of this plan that are worthy and even courageous, but this proposed change is really pretty shameful.