Will Chicago put back some money into the pockets of the overburdened working families? The notion of a city Earned Income Tax Credit has been endorsed by a new report released on Thursday. They have given six proposals for its implementation. If the notion is implemented in the city, it will benefit between 500,000 to 1 million working families in Chicago.
The Institute on Taxation and Economic Policy has issued the new report. The new report has been built upon the earlier report of Chicago Resilient Families Initiative Task Force. The task force issued a report earlier this year. The force constituted of a panel that grew out former Alderman Ameya Pawar’s proposal for Chicago to adopt a pilot program for Universal Basic Income.
The report named “Big Shoulders, Bold Solutions: Economic Security for Chicagoans,” had proposed that many goals of Universal Basic Income can be achieved by expanding the Earned Income Tax Credit. The new report, “Promoting Greater Economic Security Through a Chicago Earned Income Tax Credit,” builds upon the previous report.
The report had studied upon six different proposals for implementing the EITC in Chicago. The news release accompanying the report says, “The more modest proposals would boost Chicago families’ after-tax income, on average, between $108 to $210,” “and the more ambitious proposal would boost incomes from $898 to $1,426 on average.”
This plan is not new as the EITC goes back to the 70s where the University of Chicago economist Milton Friedman proposed the term negative income tax. Allen Sanderson, current U. of C. econ lecturer, along with Pawar, explained in a debate last year that the plan will help the low-income workers at tax time by restoring a portion of federal tax withholdings. Sanderson said, “Given the choice between giving people things and giving people money, economists would rather give them money.”