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   even out of every eight Americans
living in poverty either do not work or do not work full-time. That startling statistic makes it clear
that employment is the best solution to poverty.The federal earned income tax credit (EITC) was originally intended to reimburse low-income working families for their payroll tax (FICA) contribution. In 1993, this tax credit was dramatically expanded to serve as the nation's largest assistance program. 
Since the EITC is not available to those without a job, it provides an unambiguous incentive to work.
By increasing the income of America's least skilled individuals, the credit facilitates employment—which
in turn allows employees to increase their skill levels while earning a living.
Currently, the EITC provides up to $4,716 in tax-free income to working families. While most participants choose to receive their benefit in a lump sum at the end of the year, they have the option of receiving the benefit in every paycheck. In this way, the EITC allows low-skill employees with families to regularly receive the minimum income society deems necessary. With the EITC, a full-time minimum wage worker can experience an effective wage rate up to $8.25 an hour. With its emphasis on work, it is not surprising that the EITC increases employment. But it does more than that. Research from economists at Michigan State University and the Federal Reserve found that recipients of the EITC increase their work effort and enjoy higher earnings, moving these employees closer to self-sufficiency. The EITC is the only anti-poverty program that accomplishes this dual goal of improving the earned income of recipients (independent of the credit) while still providing cash assistance.
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