Republican Support for the Earned Income Tax Credit

Wealthy Republicans say they hate socialism.  They despise anything that smacks of "redistribution of wealth".  That's why they hate any kind of taxation.  A person should be able to keep the money he earns, they say.  And government should be small.  Many believe that the only legitimate function of government is to defend the country, and protect life and property.  The purest of the capitalists will even say that there should be no public roads and schools.  Private businesses can provide such things, and do it more efficiently than government.  People who need to use roads or educate their children would pay only for what they use, and nothing more.

But even most Republicans understand that this Randian model is unrealistic.  Government must play a role in providing infrastructure and services that are part of a thriving economy.  Republicans support government to the extent that it helps them to prosper.  They need roads and bridges and other infrastructure elements to get their goods to market.  So rather than paying for it themselves, they support taxpayer-funded infrastructure.  When it comes to schools, they would prefer to send their own children to private schools, but it sure would be nice if they could get the taxpayers to pay for that too, so they support voucher programs that take money from public schools and hand it over it to them so they don't have to pay their own tuition bills for private education.

And so we see the real Republican view of government spending and taxation.  They are in favor of government programs that are beneficial to them, but they despise any programs that are beneficial to others.  They hate welfare for the poor.  They hate Social Security, because they could invest their own money and get a better return.  These are Democrat programs that take money from honest, hard-working people and give it to the lazy, the stupid, and the undeserving.  On the other hand, they are all in favor of corporate welfare.  Hundreds of billions of dollars for massively bloated defense programs?  Well, they don't mind shortchanging military retirees and veterans' healthcare, but keep that money rolling into the defense industry, because it makes them rich.  And guess who gets to pay for it.

Wealthy Republicans see themselves as the ones who are deserving.  They are all about making wealthy people wealthier.  And they have no problem using government to promote their own selfish ends, even when it comes at the expense of everyone else.  Even though they support various forms of government spending, they still don't want to pay for it.  They do everything in their power to avoid paying taxes.  They have made the tax code decidedly slanted in their own favor, and if it turns out that they still owe something to the government, they are not above cheating.  In the infamous words of Leona Helmsley, "We don't pay taxes. Only the little people pay taxes."

Given their aversion to helping the undeserving, it is interesting to see that there has been mixed support among Republicans for the Earned Income Tax Credit (EITC).  This program helps low-income people make ends meet by giving them a tax credit based on earned income.  In other words, they have to work to get the credit.  So for Republicans, this is far superior to paying welfare to lazy people who don't work.  Still, many Republicans don't like it, because they're not the ones who get the tax credit.  [Note that I'm not talking about low-income Republicans.  They're not the ones who make Republican policy, nor do they generally benefit from Republican policies.]

There is a growing problem in the American economic system.  Low income earners don't make enough money to live on.  The minimum wage is insufficient for workers to support a family, even if they work full-time.  There are three ways to solve this.  One way is for employers to pay more than the minimum wage.  Some corporations have been shamed into doing that recently.  They see it as a prudent business move that would avoid loss of customers who might see them as money-grubbing misers.  But many employers are not so driven by public pressure.  A second way is to raise the minimum wage.  Republicans are adamantly opposed to this.  A third way is the EITC, which has some growing support among Republicans as a better alternative to raising the minimum wage.  Especially if they can expand the EITC by cutting other social programs.

But why should Republicans care at all about whether the little people have enough money to live on?  There's a hidden reason for their favoring expansion of the EITC.  This is not just a small subsidy for working people.  It's actually a large subsidy for employers.  They get to continue paying miserly wages, and the employees get a boost from the taxpayers, while the employer saves big money, which goes right to his bottom line.  So the EITC does a little to help out poor workers, but it does a lot to make wealthy business owners wealthier.  And guess who gets to pay for it.