RAPID CREDIT

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FYI: A 27-city Brookings Institution study of the Earned Income Tax Credit found it pumping $3.4 billion into local economies, benefiting one out of five taxpayers. But the study also found that a growing number of filers are claiming their EITC through high-cost “rapid refund” services. In 1999, 38 percent of people claiming EITCs nationwide did it through this sort of refund loan–at a cost of an estimated $750 million. New York City’s EITC earners were more savvy than most in the study: Only 22 percent used rapid refund loans, while in nine cities in the study over half of EITC earners did so. (For the record, twenty-one percent of New York City taxpayers collected an EITC, generating nearly $1.3 million.) Brookings stands strongly behind the EITC; check out J.W. Mason’s more skeptical look at its benefit for working families in the City Limits archives. [1/14/03]