One of the current administration's plans is to expand the Earned Income Tax Credit (EITC) to older
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Question:
One of the current administration's plans is to "expand the Earned Income Tax Credit (EITC) to older workers" (65 years old or older) in the hope of "helping low-wage workers achieve a living wage"
i) Explain how an EITC works.
Make a graph, using the Table 7.5 of textbook to highlight its effects on the income of the poor. (Have the annual earned income to the horizontal axis & annual disposable income to the vertical axis.)
ii) How would this expansion of the EITC affect workers? What would be the effect relative to a simple stipend or a negative income tax (NIT)?
Explain the EITC's effects on work incentives. Compare and contrast the EITC to those alternatives.
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