A lead investor in Blue Apron has a master plan to help nearly 2 million families escape poverty

  • In June 2017, California Governor Jerry Brown agreed to expand funding for the Earned-Income Tax Credit, or EITC.
  • The EITC is a social welfare program that gives low-income workers a lump-sum payment around tax time.
  • Joe Sanberg, head of the nonprofit CalEITC4Me, is on a mission to help millions of Californians achieve financial freedom.

This past June, California Governor Jerry Brown signed a piece of legislation that Joe Sanberg, a lead investor in Blue Apron and the founder of Aspiration.com, couldn’t have been happier about.

Brown, together with other state leaders, agreed to expand a social welfare system known as the earned-income tax credit, or EITC, from 600,000 families to 1.7 million. Essentially a big tax refund that incentivizes work, the EITC gives qualified families more than $US2,500 a year. It can mean the difference between poverty and a taste of financial freedom.

Sanberg’s nonprofit, an EITC advocacy group known as CalEITC4Me, helped push the measure through.

“The big policy win … wasn’t driven by influencers contacting politicians,” Sanberg told Business Insider. “It was driven by low-income Californians contacting their elected officials, demanding EITC expansion.”

Sanberg has made it his mission to help low-income California workers get as much financial help as they can. He is a possible candidate to run for US Senator in 2018, replacing Senator Diane Feinstein. His main cause is standard of living. As technology automates away huge swaths of American jobs, more people are poised to fall into roles that may not pay a livable wage.

Joseph SanbergWikimedia CommonsJoe Sanberg, head of CalEITC4Me.

Sanberg’s first step is helping Californians find the money they’re leaving on the table. The federal EITC has about $US1.8 billion in unclaimed funds, and California’s has about $US295 million, which means there is more than $US2 billion that Californians could rightfully claim on their federal and state tax returns, based on their income level.

The trouble is, a recent survey found fewer than one in five Californians who were eligible for the program had heard of it. CalEITC4Me was created in 2015 to help California workers making less than $US25,000 a year learn about the EITC, get free tax prep so they can claim the EITC, and file their tax returns.

“That middle point is really important,” Sanberg said, adding that millions of Californians mistakenly pay for tax prep they could get for free as part of the IRS’s Volunteer Income Tax Assistance program.

Sanberg believes every American should have the basic necessities in life, which he defined as housing, healthcare, food, clothing, transportation, and education. The EITC is his starting point, he said, since it represents such an untapped source of income for workers in his state.

At the recent CASH Conference, held in San Francisco to discuss the future of income equality, Sanberg spoke on how to create a future where people’s basic needs are met.

Beyond EITC, Sanberg said he envisions amending the measure so it can be paid out to even more people, like freelance workers, and at different times throughout the year, not just at tax time. He also is pushing for Medicare for all, a $US25 minimum wage, and a fundamental shift in how Americans think about their work.

“We’re all raised to embrace this social contract, this idea that working should pay for your basic needs and let you live with financial security,” he said. “And that has broken down for most working Americans, and we have to fix it right now.”

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