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  3. Journal of Economic Perspectives
  4. Summer 1990
  5. Policy Watch: Tax Credits for Low-Income Workers with Children

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Policy Watch: Tax Credits for Low-Income Workers with Children

  • C. Eugene Steuerle
Journal of Economic Perspectives
vol. 4, no. 3, Summer 1990
(pp. 201–212)
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Abstract

The most important tax credits available to low-income households with children are the earned income tax credit (EITC), the child tax credit, and the child and dependent care tax credit (hereafter, child-care credit). Only the EITC and the child-care credit exist in current law in the United States. This note will discuss some equity and efficiency implications of four commonly stated purposes of these credits within the tax/transfer system: greater progressivity, adjustments for the presence of children, greater choice among goods and services, and greater work incentives for low-income individuals.

Citation

Steuerle, C Eugene. 1990. "Policy Watch: Tax Credits for Low-Income Workers with Children." Journal of Economic Perspectives 4 (3): 201–212. DOI: 10.1257/jep.4.3.201

JEL Classification

  • H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
  • I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
  • J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
  • J13 Fertility; Family Planning; Child Care; Children; Youth
  • J31 Wage Level and Structure; Wage Differentials