Washington, D.C. — Rebecca Vallas, managing director for the Poverty to Prosperity Program at the Center for American Progress, released the following statement upon introduction of the Grow American Incomes Now (GAIN) Act by Rep. Ro Khanna (D-CA) and Sen. Sherrod Brown (D-OH). The bill would significantly strengthen the Earned Income Tax Credit (EITC) to reduce inequality.
Among other provisions, the bill embraces a proposal put forth by CAP in 2014 to give EITC recipients the option of accessing a portion of the refund they have earned halfway through the tax year, given that many expenses can’t wait for tax time. The provision aims in part to cut down on families’ need to turn to predatory payday lenders when faced with a financial emergency. The EITC “Early Refund” option would have a maximum value of $500, while the average payday loan is $375.
As President Donald Trump and congressional Republicans continue to push tax cuts for the wealthiest among us, Sen. Brown and Rep. Khanna are taking steps to support working Americans and help income growth. CAP is especially grateful for their leadership in helping workers weather an emergency through the EITC Early Refund option. Rather than having to turn to predatory payday lenders, shut off the heat, or forgo a car payment, this Early Refund will provide a modest but meaningful financial cushion to help families avoid a downward spiral of debt.
While we fight to advance policies to boost economic security and reduce income inequality in the face of Trump’s attacks on working families, the GAIN Act is a critical step forward to protect families in communities across the country from predatory payday loans and help them stay afloat when times get tough.
- Harnessing the EITC and Other Tax Credits to Promote Financial Stability and Economic Mobility by Rebecca Vallas, Melissa Boteach, and Rachel West
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