About the Cost-of-Living Refund
We are living in a time of record income inequality and volatility. In one of the most prosperous countries in the world, workers are still struggling to meet basic expenses and achieve a measure of financial security. A Cost-of-Living Refund is grounded in the understanding that people need a boost to meet today’s rapidly rising costs and cannot move ahead if they are struggling to just get by. By modernizing the Earned Income Tax Credit (EITC), we can create a powerful and practical plan to help low-income and middle-class people.
There is no better policy to provide economic stability to working people. The EITC lifts more families out of poverty than food stamps, housing subsidies, and unemployment insurance combined. Cash gives people the tools to solve their own problems. Today, 57% of Americans can't afford a $500 emergency, with worse rates among people of color. A voter in an Arizona focus group said, “I’m one emergency away from financial ruin.” A woman in Ohio added that anyone asking whether $100 a month is enough to matter “has never had to choose between groceries and rent.”
Yet, in its current form, the EITC cannot fully address the needs of hard-working families in an economy shaped by low-wage work and high concentrations of wealth.
Community members at a rally for a Working Families Tax Credit (or Cost-of-Living Refund) in Washington State. (3/21/19)
Policy background about the Cost-of-Living Refund (also called a Working Families Tax Credit) and how to talk about it:
How it works in a state
How it works at the federal level
Messaging Resources and Polling
Messaging the Cost-of-Living Refund (includes summary of polling data)
Poll on tax cuts for wealthy vs tax credits for working people, Aug. 2018
CA June 2019 EITC poll full toplines and crosstabs
Background Materials
Policy Backgrounders
Expanding work
“Supporting family caregivers through the EITC,” Caring Across Generations, 2019.
Paying the credit monthly
“Restructuring the EITC,” Center for Economic Progress report on Chicago periodic payments pilot
The value of monthly payments from the perspective of the “Submerged State,” The New Republic, 2011.
Monthly payment policy recommendations:
Simplifying the credit to improve access
Simplifying the EITC through automatic filing: why it matters
Simplified/automatic filing policy recommendations:
ComplementING the minimum wage
“State earned income tax credits and minimum wages work best together,” Center on Budget and Policy Priorities, Mar. 2019.
Extending Tax Credits to All Tax FilerS
“HB 3028-A Makes Oregon’s EITC More Equitable and Effective,” (ITIN filers), Oregon Center for Public Policy, 2019.
“Expanding the CalEITC Is an Effective Way to Invest in California’s Children, But Hundreds of Thousands of Children of Immigrants Won’t Benefit Unless Policymakers Act,” California Budget & Policy Center, May 2019.