> Earned income tax credit is amazing. It is one of the few government initiatives that is an unquestionable success. It is such a good way to redistribute wealth without creating the negative incentives of welfare and the like.
EITC, because of the phase out, has the same negative incentives as any other means-tested social benefit program which has a benefit reduction at less than a 1:1 level for additional income. (Its true that there are some other social benefit programs that have worse negative incentives at some or all points because either they are flat benefit with a sharp cutoff or because they have some range in which the benefit decline is greater per additional dollar of other income than EITC has, but its simply not the case that EITC doesn't have "the negative incentives of welfare and the like".)
