State Earned Income Tax Credits and “Making Work Pay”: How Maine Might Help Workers

Abstract

Established in 1975, the Earned Income Tax Credit (EITC) became the federal government’s largest antipoverty program for citizens under the age of 65 by the mid-1990s. In this article, Glenn Beamer gives a brief overview of how the program works and how states have piggybacked on the federal EITC to further assist their working poor. He observes that Maine’s EITC policy does not fully avail itself of potential returns and points to other states with policies that provide greater benefits for the working poor. He suggests that expanding Maine’s EITC not only would provide working Mainers with extra income, but also would direct resources to parts of the state that are struggling economically.