The Earned Income Tax Credit, or the EITC, is the subsidy to the working-class families provided by the government. Although it is possible to use them for education or another long-term spending, the people receiving them are often forced to use them immediately for overdue payments, for example. Since the EITC is linked to one’s income, it is necessary to continue working to receive the credit.
Furthermore, it incentivizes people to declare and pay their taxes, as tax returns are also a necessary condition. Regardless of the pay level, individuals can use this credit for either necessities or luxuries, which can improve their quality of life significantly. Therefore, all of these incentivize people to work harder and longer, as well as be law-abiding regarding taxes.
However, Shipler also mentions that there is a cost associated with getting the credit, as well as other obstacles. Many employers will not go through the trouble of offering and providing the forms necessary to their employees. Furthermore, many employees will not even be aware of the availability of such funds to them. It can be intimidating for individuals, especially those of the working class with no money to lose, to be doing their own tax returns and other legal and financial forms.
Therefore, they might be inclined to waste hundreds of dollars on paying companies and professionals to fill out the documents for them. This lack of relevant information and support available to Americans hinders their ability to access the credit they are entitled to otherwise. Therefore, the initiative might be lost on them, whether due to their unawareness of the situation or their inability to participate in the scheme due to time or financial constraints.