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.
A federal Cost-of-Living Refund offers a strong economic policy to address poverty and reduce financial instability.
A number of state groups are also pushing to expand and modernize the EITC in their states, offering an opportunity to see a Cost-of-Living Refund on a local scale while paving the way for a CLR on a federal level.
The Cost-of-Living Refund has been shown to be widely popular and addresses people’s top concerns on achieving financial stability and making ends meet.
What is the Earned Income Tax Credit?
While the Earned Income Tax Credit has been proven to be one of the most effective anti-poverty measures instituted, the Cost-of-Living Refund offers bold changes that draw on the benefits of the existing EITC and adjusts the policy to new challenges of today.
The need for the Cost-of-Living Refund comes at this moment in time of record income inequality exacerbated by the tax code.
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