Promoting Access to the Earned Income Tax Credit
The Earned Income Tax Credit (EITC) plays a key role in lifting low-income and working-class families out of poverty – yet those who stand to benefit the most from this credit often do not know it exists or are unsure how to file for it. Earlier this year, entrepreneur and investor Joe Sanberg announced the launch of Working Hero Action, an expansion of the CalEITC4Me campaign started in California, which is dedicated to promoting awareness and access to the Earned Income Tax Credit. Working Hero Action now has a robust operation in South Carolina and Iowa, with other states to follow. We spoke with Laura Capps, co-founder of Working Hero Action, to talk about this work and how the organization works to fight poverty and promote opportunity. The conversation has been lightly edited for length and clarity.
Can you tell us more about how Working Hero Action started and your impetus for expanding the organization beyond California?
Ultimately this is about ending poverty. A bold goal I realize – but we do have the tools to achieve it. I’m drawn to the idea of connecting people to underutilized programs. Wherever you are, there’s a number of eligible people – approximately 65% – who aren’t utilizing services like free and reduced lunch, food stamps or the EITC. There’s almost always a gap and I’m fascinated by how to close it. That’s the big picture challenge that motivates me every day.
Joe is a visionary and started this work in 2015 in California to close that gap and ensure that millions of hard-working people who are eligible for this life-changing tax credit actually claim it. After being very successful in California, we wanted to expand elsewhere, and ultimately want to expand to all 50 states.
In 2018, Joe and I decided early on that we wanted to start a Political Action Committee (PAC) to support candidates committed to poverty alleviation. We raised money for 17 candidates around the country and held community events with them, all focused on poverty.
A year later, we started the advocacy arm of this work – Working Hero Action – and our mission is two-fold: to connect low-income people to the EITC that they’ve earned as well as elevate the issue of poverty nationally. We’re becoming a force in the presidential campaign by engaging in states that have both state EITC programs and are important primary and caucus states.
Why aren’t people utilizing the ETIC, and how do you encourage people to file for the credit?
People don’t know it exists. The vast majority of workers who are eligible don’t owe any income tax. Why would someone who doesn’t owe taxes file them, which is the only way you can receive the EITC? They may not be keyed into financial literacy, and don’t necessarily have access to expensive accountants. There’s an even higher outreach threshold than other programs because it requires taking an unpopular action – filing taxes – that they aren’t required to do.
In South Carolina, there are about 100,000 people who qualify for EITC who are not receiving it, leaving over $300 million on the table. It’s as much about making an impact on awareness as on moving enrollment. The understanding that this work is year-round, and not just concentrated on Tax Day, is something that we’re trying to raise awareness of.
Does your organization help people apply to the EITC or mainly create awareness, so people know this is available for them?
Both. We connect them to free tax prep services offered by valuable partners like United Way. There are awesome retired accountants at United Way who volunteer their time and we help bring the EITC population in the door. We’re more oriented toward the kind of outreach you might see on a political campaign, such as texting and social media to reach this population. And in Iowa and South Carolina our strategy is to hold community events with all the presidential candidates – we’ve done several so far with Booker, Warren, Harris, etc. – all focused on this work so that their megaphone helps us get the word out.
Is the c4 branch of your work looking for any particular policy change on EITC, or just seeking to get candidates talking about poverty?
Yes – we want to help states expand their state EITC programs. We also want to make sure the presidential candidates, as well as state legislators, are looking into how people are thinking about these issues and talking about the silent suffering of poverty. It impacts one out of two Americans yet is not focused on enough by our leaders. Most Americans are working but can’t afford life’s basic needs. That needs to change.
Will you be doing events with Republican candidates as well?
We’d welcome that. The EITC is a bipartisan issue that for decades has garnered strong support from both sides. Ronald Reagan expanded it greatly as did my old boss President Clinton. The support in the state legislature in California is thankfully very bipartisan. Because of the money it puts back into people’s pockets who then spend it in their community, it is as much an economic stimulus initiative as it is an anti-poverty one.
What other states are you thinking of working with in the future?
We’re in the formative stages of working in Ohio. Zachary Klein, the Columbus City Attorney in Ohio, thinks poverty is the underlying catalyst for a lot of crime, so his office has devoted resources to fighting poverty and getting more people signed up for the EITC. We’ve also started working with Senator Sherrod Brown of Ohio, a national leader on the EITC.
These campaign events can really give people an opportunity to talk about issues in their lives. What do you enjoy most about this work?
Connecting people – usually women who are caring for their families – with this tax credit has a meaningful impact on their lives. They tell me how it means they can buy shoes for their kids. It’s tangible. I feel lucky to be able to do it.
What I also enjoy are the people I get to work with – the team we’ve put together. I’ve been heartened by so many people I’ve worked with along the way. They’re eager to share what they’ve learned often in politics and now in this realm of fighting poverty and causes they really care about. It’s been a pleasure to make that transition from more traditional politics to a space that’s actually helping people in tangible ways in their lives. I just think that’s exciting.
Laura Capps is co-founder of Working Hero Action