Redistribution and Tax Expenditures: The Earned Income Tax Credit / Nada Eissa, Hilary Hoynes.

Format:

Book

Author/Creator:

Eissa, Nada.

Contributor:

National Bureau of Economic Research.

Hoynes, Hilary.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14307.

NBER working paper series no. w14307

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Redistribution and Tax Expenditures

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

This paper examines the distributional and behavioral effects of the Earned Income Tax Credit (EITC). We chart the growth of the program over time, and argue several expansions show that real responses to taxes are important. We use tax data to show the distribution of benefits by income and family size, and examine the impacts of hypothetical reforms (expansions and contractions) to the credit. Finally, we calculate the efficiency effects of marginal changes to EITC parameters. Targeting the EITC to lower-income families by raising the phase-out rate generates a welfare loss for single mothers, primarily because of the disincentive to enter the labor market and not the traditional hours-of-work distortion.

Notes:

Print version record

September 2008.