> From: [EMAIL PROTECTED]
> Subject: [PEN-L:11482] Re: Child tax credit
Maggie,
> Max (or anyone else), I have a question on how the eitc debate is being
> formulated. The standard conservative/ mainstream economic response to
> minimum wage, and rises in minimum wage, is that there will be higher
> unemployment because employers are now forced to pay unskilled labor at a
> rate higher than their marginal product. In reality, the last raise in
> minimum wage preceeded a significant decrease in unemployment, and, stood in
> some sense (IMHO) for a real world 'proof' of Keynesian economics--that
> higher wages mean more spendable income and drive the economy toward real
> growth. Now, assuming eitc would have much the same effect of increasing
Right. The lack of disemployment effects from the recent minimum
wage rise is is further documented in a new EPI report.
> income by reducing the tax bite on dollars for low income working families, a
> Keynesian argument would be that this would take more families off welfare
> and put them into the workforce because there would be more jobs at some
> point. The question (finally): Is any of this argument being waged by the
Yes, but you can also get that result just from NC micro-reasoning,
as I pointed out in my previous post.
> proponents of the eitc or other tax breaks to working families?
Supporting the EITC is good politics because the only thing
the public sees is more after-tax income for people who
work. The fact that many families end up with a negative
tax liability, from the standpoint of the income tax, doesn't
bother people. When the Right calls it welfare, we scream
this is for people who WORK, you moron. By associating
'welfare' with 'nonwork,' the Right has opened itself to an
assault on behalf of people who work in the form of demands
for bigger and better refundable tax credits, FLSA protection,
free health care, etc. When the welfare rights movement makes
its final transformation into a movement on behalf of poor people
who are working, as opposed to people who would like to work
but don't for an assortment of reasons, some of them not credible,
I think it will be a major tonic for progressive politics.
Cheers,
Max
"People say I'm arrogant, but I know better."
-- John Sununu
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Max B. Sawicky Economic Policy Institute
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Opinions above do not necessarily reflect the views
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