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Earned Income Tax Credit Important for Rural Areas

PHOTO: A new study on the effectiveness of the Earned Income Tax Credit (EITC) shows it has been a more significant factor for people in small towns and rural areas than in cities. Photo credit: Brood_Wich/Flickr.
PHOTO: A new study on the effectiveness of the Earned Income Tax Credit (EITC) shows it has been a more significant factor for people in small towns and rural areas than in cities. Photo credit: Brood_Wich/Flickr.
November 19, 2014

CHARLESTON, W.Va. - A tax credit helping many low-income working families keep more of their earnings is proving to be especially important in rural areas and small towns, in West Virginia and across the country, according to a new report.

The Earned Income Tax Credit has been touted as one of the most effective anti-poverty policy efforts and a nationwide analysis by Jon Bailey, rural policy director at the Center for Rural Affairs, found "the Earned Income Tax Credit was used by more people in rural and small-town, small-city areas than in big urban areas in the country."

Bailey says the higher use of the tax credit tracks right along with the other economic indicators that point to many rural families still struggling financially.

Nationwide, the number of those who claim the credit is less than 19 percent in metropolitan areas, compared to more than 21 percent in rural areas and smaller towns and cities. Bailey predicts that divide will continue to widen.

"Because the gap between rural areas and urban areas has been growing," he says. "If that trend continues I would suspect more people are going to need to use the Earned Income Tax Credit. It's going to be even more important."

Bailey says the increasing importance of the Earned Income Tax Credit to working families should send a message to federal policymakers to strongly consider proposals to expand its reach and make more people eligible.

Dan Heyman, Public News Service - WV