earned tax credit eitc research paper

Words: 984 | Published: 12.30.19 | Views: 404 | Download now


Get essay

Federal Finances, Single Mother or father, Minimum Income, Ronald Reagan

Excerpt via Research Newspaper:

Finally, a 1998 Direct attention to Budget and Policy Priorities report, analyzed research, data and studies on the EITC found that after this research was described to it is substantiate portions, several great themes within the benefits of the EITC emerged. They incorporate (Greenstein Shapiro, 1998):

Substantive positive effects about inducing solitary parents to work. A report by Northwestern University economic analysts Bruce She and Lalu Rosenbaum. Meyer and Rosenbaum found more than half the substantial embrace employment prices among solitary mothers within the 1984 to 1996 period was due to EITC growth; a larger impact on single mom employment than all other elements combined (Greenstein Shapiro, 1998).

EITC offsets between one-fourth and a third of the decrease during the past two decades in the share of national income received by the weakest fifth of households with children (Greenstein Shapiro, 1998).

Among doing work families, particularly in the southern where doing work families probably have reduce wages and thus are more likely to be eligible for the EITC, the EITC lifts substantially more kids out of poverty than any other government program or category of courses.

A study simply by Columbia University’s National Centre for Children in Poverty found that the EITC reduces lower income among young children by practically one fourth. (Greenstein Shapiro, 1998)

Data in the Census Bureau’s Population Survey show that in mil novecentos e noventa e seis, the EITC elevated the incomes of some 4. 6 , 000, 000 people in low-income operating families would you have been below the poverty level without this; more than half of those who benefitted – installment payments on your 4 million people – were children (Greenstein Shapiro, 1998)

The EITC is not, nevertheless , without their detractors. A 2005 study looking at the effect of the EITC comparing the labor marketplace behavior of eligible parents in Wisconsin found the fact that EITC got no effects on the number of hours the family worked. While different studies viewed the behavior of families over time, this analyze looked especially at the actions of entitled families with three kids in the condition of Wisconsin, which supplements the federal EITC for families with three children, to that of similar parents that do not supplement the federal EITC (the Federal government EITC to get families with 2 kids is identical to that pertaining to families with 3 children) (Cancian Levinson, 2005). Although the study highlights many complications with doing longitudinal studies, it has two crucial problems. The foremost is it fails to deal with the structural and policy differences from state to state, and secondly this fails to take into consideration how a lot of the people really looking at are actually making use of the EITC, for engagement is the EITC’s Achilles back heel.

In order to obtain the EITC generally one has to not only function but likewise file a federal income tax returning. The General Accounting Office estimated that it happened in 1999 only about 74% of homeowners who were entitled to the credit actually believed it; people with one or two children had the highest engagement rates, but only 62. 5% of eligible homes with three or more kids claimed the credit in 1999, and only forty-four. 7% of eligible child households claimed it (Cordes, Ebel, Gravelle, 2005). Basically, it’s unsurprising that the Wisconsin study found almost no big difference in labor participation in those people with three or more children, because they are the other least very likely type of home to take engage in the program (why that is, is probably the topic another paper).

Total, for most types of the poor the EITC seems to do what sets out to perform, alleviate lower income without creating barriers to work. This can be good news because the way the program is implemented – through the IRS makes several essential benefits. Management costs for traditional money assistance courses such as TANF and foodstuff stamps can easily run up to 15%, the EITC runs a paltry 1% in contrast (the John France Institute, 2004). In addition , it manages to be relatively efficient with out running up employer costs, and while also potentially creating new careers vis-a-vis the multiplier impact.


ACORN Financial Justice Center. (2004). Increasing Incomes Reducing Speedy Refund Rip Off. Washington, DC.

Cancian, M., Levinson, a. (2005). Labor Source Effects of the Earned Income Tax Credit: Proof from Wisconsin’s Supplemental Advantage for Households With Three Children. Journal of Economical Literature.

Center on Budget and Policy Priorities. (2009, December 4). Policy Basics: The Earned Tax Credit. Gathered March 20, 2010, coming from Center on Finances and Insurance plan Priorities: http://www.cbpp.org/cms/index.cfm?fa=viewid=2505

Cordes, J. J., Ebel, R. Deb., Gravelle, J. G. (2005). The Encyclopedia of Taxation and Duty Policy, Second Edition. Baltimore: Urban Institute Press.

Greenstein, R., Shapiro, I. (1998). New Research Findings around the Effects of the Earned Income Tax Credit. Buenos aires, DC: Direct attention to Budget and Policy Goals.

Haskell, L. (2006). Your the Earned-Income Tax Credit rating in Nashville: An Examination of Economic Immpacts and Geographic Syndication of the “Working Poor” Duty Credit, TY 1997-2004. Nashville: The Nashville Wealth Building Alliance.

Hotz, V. J., Mullin, C. L., Scholaz, M. K. (2006). Examining the Effect of the Attained Income Tax Credit rating on the Labor Market Involvement of Households on Well being. Cambridge: The National Bureau of Economic Research.

Sobel, R. S i9000. (2007). Unleashing Capitalism: So why Prosperity Halts at the West Virginia Border and How to Correct it. The Public Plan Foundation of Western world Virginia

< Prev post Next post >