Facebook Co-Founder Proposes Providing Basic Income through the EITC
By Devin Simpson
In an effort to combat the ever-growing income gap, Facebook co-founder Chris Hughes proposes an expansion to the Earned Income Tax Credit (EITC) to provide a basic monthly income to lower-wage workers. And he wants his fellow “One Percenters” to pay for it.
In his new book, “Fair Shot: Rethinking Inequality and How We Earn,” Hughes outlines a plan to provide $500 per month through the EITC to every American worker earning less than $50,000 a year. The proposal would expand the definition of “work” to include caregivers and students, acknowledging the contributions of 30 million Americans, according to Hughes. The expanded EITC would be funded in large part by increasing the income tax rate for those earning $250,000 or more.
In an interview with CNN Money, Hughes argued that providing a guaranteed income is the best way to help working Americans who struggle to make ends meet. Instead of creating a new Universal Basic Income program, Hughes said, lawmakers should invest in what works: the EITC. He called the EITC “the single most successful program to support economic mobility and fight poverty in the United States.”
Recent data have shown that the top one percent of American households own more wealth than the bottom 90 percent combined. According to Hughes, if his proposal were to become law, an average household with two adults in minimum wage jobs would see their incomes increase by 40 percent. Hughes’ proposed changes “would help 90 million Americans make ends meet and lift 20 million out of poverty.”
Hughes acknowledges that his plan is not a “silver bullet” for ending poverty but contends that expanding the EITC would be the most immediate and proven way to help lower-income Americans build wealth and save for the future.