The progressive nature of our tax code is supposed to help the poorest Americans, but it is actually doing the opposite for seven million childless workers. It’s dragging them into poverty.

The tax code has two main purposes: It raises revenue for the federal government and it gives back a significant amount of that revenue in the form of tax expenditures. Tax expenditures include provisions like the mortgage-interest deduction, the deduction for employer-sponsored health insurance, the earned-income tax credit (EITC), and the child tax credit. The Congressional Budget Office projects them to total $1.4 trillion in 2014—a huge amount compared to the $3 trillion in revenue the government will collect in total.

Some economists argue that this system doesn’t make any sense. The tax code should be for raising revenue, not spending money. In addition, the top 20 percent of earners collect more than half of the benefits from these expenditures, according to the CBO. But they are classified as part of the tax code, not as government spending.





Switching to a system where the tax code’s sole purpose was to raise revenue and all spending was classified as such could make it harder for upper-income households to justify their opposition to higher taxes or less government spending. But that’s not happening anytime soon. Politicians have their favorite tax breaks. Americans dislike huge, disruptive changes. And, as a whole, low-income households benefit the most from tax expenditures as measured by the percent of their after-tax income:





But there is one group that has been left behind: low-income, childless workers. Five economists at the Center for Budget and Policy Priorities examined Census Bureau data and found that the tax code pushed seven million childless adults either into poverty or deeper into poverty in 2012. The reason for this is the structure of the EITC. The EITC offers benefits to working, low-income adults. A working parent with two kids can collect more than $5,000 from the EITC. With three kids, it’s more $6,000. The Congressional Research Service (paywall) found that the EITC reduced the number of families in poverty by between 14 and 29 percent in 2012.