EIC

Since I do taxes I am quite familiar with what is known as Earned Income Credit or EIC. This is in the news today because the government is placing ads in papers across the country to encourage people to apply for these benefits. This program was started by President Ford in 1975 to encourage people on welfare to work since you only qualify for the benefit if you have earned income, that is, you work. The maximum benefit in 1975 was $400 and this year the maximum is $5,700. One dollar in 1975 would be worth $4.57 today but one dollar of EIC in 1975 would be worth $14.25. Like most government programs they start modestly but grow rapidly. I personally like this program since only low income people are eligible. It is for those with family incomes below $50,000 and they need the extra help. The program cost 60 billion last year and helped 30 million families mostly families with children. The average family received $2,000.