EITC Impact in Georgia and the Nation

During the late1990s in Georgia, "the average before-tax income of a family in the bottom fifth of the income distribution was around $11,500. Adjusted for inflation, these families were actually earning 6 percent less than they were during the late 1970s" (Brookings 2001a). Federal EITC eligible workers in Georgia may include janitors, security guards, school bus drivers, pre-school teachers, dental assistants, cooks, graphic designers and receptionists, to name a few (Brookings, 2001a).

This decline in purchasing power, even among those with full-time employment, is a problem for both urban and rural Georgia. Receiving much media attention is the problem of the "Two Georgias," the designation given to the wide gap that exists between the tremendous growth in the metropolitan Atlanta area and the economic condition of the rest of the state. Georgia has had the second highest growth in per capita income in the southeast in the past 20 years, yet this economic prosperity is not evenly distributed throughout the state. As recently as 1997, 139 of Georgia's 159 counties had per capita income levels below the average for the Southeast United States (Georgia Rural Development Council, 2000).

The Georgia Rural Development Council, in their January 2000 report "The State of Rural Georgia" categorized only 50 Georgia counties as either developing or rapidly developing. Of the rural counties, approximately 50 are either lagging or declining.

The Council noted that many lagging and declining rural communities "are simply not prepared for large-scale economic development." Instead, "these communities would benefit greatly from a sustained effort to overcome the socio-economic distress rooted in illiteracy, teenage pregnancy, high dropout rates, drug use, poor schools, and lack of healthcare."

In terms of dollars, the federal Earned Income Tax Credit delivered over $30 billion to 18.4 million low-income families across the U.S. in the 2001 tax year (Brookings, 2001b). In studies cited by the Brookings Institution, "between 1993 and 1999, the number of families receiving the EITC increased by 29 percent. The number of people lifted out of poverty by the EITC increased by 124% over the same time period."

This contrasts sharply with other federal programs. Citing "Poverty and Income Trends, 1999" by the Center on Budget and Policy Priorities, Brookings notes that "Social security insurance lifted 300,000 less people out of poverty in 1999 than it did in 1993. Food stamps helped about 700,000 less people in 1999 than in 1993. And means tested cash benefits, mainly TANF, lifted 600,000 less."

Data sources:

• Alan Berube and Benjamin Forman (2001a). Rewarding Work: The Impact of the Earned Income Tax Credit in Greater Columbus, GA. Washington, DC: Brookings Institution. Center on Urban and Metropolitan Policy. See also other Georgia cities in this series.
  
• Alan Berube and Benjamin Forman (2001b). A Local Ladder for the Working Poor: The Impact of the Earned Income Tax Credit in U.S. Metropolitan Areas. Washington, DC: Brookings Institution Center on Urban and Metropolitan Policy.
  
• Georgia Rural Development Council Technical Advisory Committee (2000). The State of Rural Georgia: "Surviving, not Thriving." Atlanta: Georgia Rural Development Council.

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