Fox Business host Stuart Varney dismissed the benefits of the Earned Income Tax Credit (EITC), a highly effective anti-poverty program, as "corrupt," falsely claiming that it offers excessive benefits to people "who have never paid a dime in their lives," while admitting, "I am being mean to poor people. Frankly, I am."
On the June 5 edition of Fox & Friends, Varney continued his campaign against the EITC, demonizing the program as a "corrupt" effort to redistribute income to "people who have never paid a dime in their lives" [emphasis added]:
VARNEY: Okay, if you work, on the books, you've got a job but you earn very, very little money, you get a check from the government. It is to make up. It's essentially it's a tax credit in the form of a check from the government. We hand out $79 billion every January to these so-called poor people who get a direct check from the taxpayer. That's not complicated. It is corrupt. Because you've got a lot of people who are not reporting off-the-books income but still getting the check.
GRETCHEN CARLSON (co-host): Well why you say so, so the so-called poor people. You're not being mean to poor people today.
VARNEY: I am. I am being mean to poor people. Frankly, I am.
VARNEY: Because this is a direct transfer payment from this group of people who pay taxes--
STEVE DOOCY (co-host): Right.
VARNEY: To this group of people who have never paid a dime in their lives but they get a check from the government.
VARNEY: Let's get to the basics here. This is, in my opinion, a corrupt program administered by the IRS. They're giving out money which they should not be giving out--
BRIAN KILMEADE (co-host): And why is this?
VARNEY: That budget, the IRS budget is $11 billion. They've given out $13 billion by mistake in this one program.
Why put these people -- why put the IRS in charge of policing Obamacare?
Why do that?
The EITC is set up as a tax credit, not a stipend or a subsidy as Varney implied, and the value is based on the earnings of an individual or family and the number of children supported, increasing in value as workers earn more, until a maximum limit is reached. When earnings reach that certain threshold, payments stabilize and then phase out. The credit is "designed to encourage and reward work" for low-income Americans.
Research has shown that the EITC has been successful at promoting employment. As the Federal Reserve Bank of San Francisco stated in a March 2012 letter, "[t]he EITC unambiguously encourages some people not working to enter the labor market." The National Bureau of Economic Research similarly found that the EITC has a "substantial, positive effect on the employment of families who have used or will use welfare." And the Congressional Budget Office asserted that the EITC has had particular success in improving employment and reducing poverty for low-income single mothers.
Additionally, the program has helped reduce poverty. A February 1 Center on Budget and Policy Priorities (CBPP) report noted that in 2011, the EITC "lifted an estimated 500,000 people out of poverty and reduced the severity of poverty for approximately 10 million poor people." And an April 9 CBPP report found that the EITC's benefits are far-reaching, including potentially improving infant health and helping to improve child academic performance such that the children of recipients are "likelier to attend college, and earn more as adults" than if their parents had not received the tax credit.
Varney has a long history of promoting tax cuts that benefit the rich while pushing to end policies that assist the poor, and has smeared the nation's low-income individuals, going so far as to claim that what low-income people really "lack is the richness of spirit."