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Earned Income Tax Credit: More Common in Small-town Texas

PHOTO: A new analysis of the Earned Income Tax Credit shows its effects are more significant in small towns and rural areas than in bigger cities. Photo credit: Tax Credits/Flickr.
PHOTO: A new analysis of the Earned Income Tax Credit shows its effects are more significant in small towns and rural areas than in bigger cities. Photo credit: Tax Credits/Flickr.
November 24, 2014

AUSTIN, Texas – 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 across the state and the country, according to a new study by the Center for Rural Affairs.

"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," says Jon Bailey, who conducted the nationwide analysis.

The Earned Income Tax Credit has been touted as one of the most effective anti-poverty policy efforts.

Bailey, the center’s rural policy director, 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 small towns and cities.

Bailey predicts that divide will continue to widen.

"Because the gap between rural areas and urban areas has been growing,” he explains. “So if that trend continues, I would suspect that 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, making more people eligible.




John Michaelson, Public News Service - TX