Tax Policy Toward Low-Income Families / Hilary Hoynes, Jesse Rothstein.

Format:

Book

Author/Creator:

Hoynes, Hilary.

Contributor:

National Bureau of Economic Research.

Rothstein, Jesse.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22080.

NBER working paper series no. w22080

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

In this paper, we review the most prominent provision of the federal income tax code that targets low-income tax filers, the Earned Income Tax Credit (EITC), as well as the structurally similar Child Tax Credit (CTC). We frame the paper around what we see as the programs' goals: distributional, promoting work, and limiting administrative and compliance costs. We review what is known about program impacts and distributional consequences under current law, drawing on simulations from the Tax Policy Center. We conclude that the EITC is quite successful in meeting its three goals. In contrast, most of the benefits of the CTC go to higher income households. In addition to analyzing current law, we assess possible reforms that would reach groups - for the EITC, those without children; for the CTC, those with very low earnings - who are largely missed under current policy.

Notes:

Print version record

March 2016.