Editor's Note: This blog post was authored by Bob Annibale, Global Director of Citi Community Development and Microfinance.
Earlier this week, President Obama was sworn in for a second term, and his inaugural address drove home the notion that “prosperity must rest upon the broad shoulders of a rising middle class.” Yet the U.S. Census Bureau reports that in 2011, 46.2 million people — or nearly one in six Americans —lived below the official poverty line of $23,201 a year for a family of four. Millions more households live just above this level, and even more lack almost any savings. Prosperity, however, will only really be achieved when it is a shared and inclusive prosperity, recognizing the contributions made by all communities.
Income inequality has been widening over the last 40 years, but new analysis of the U.S. Census Supplemental Poverty Measure by the Brookings Institution provides some hope. It underscores the idea that two tax credits for working families — the Earned Income Tax Credit (EITC) and its companion Child Tax Credit (CTC) — have been crucial tools for many low- and moderate-income families to raise their standards of living, build assets and educate their children.