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David Neumark - One of the best experts on this subject based on the ideXlab platform.
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do state Earned Income tax credits increase participation in the federal eitc
Public Finance Review, 2020Co-Authors: David Neumark, Katherine WilliamsAbstract:In recent years, many states and some local governments implemented or expanded their own supplemental Earned Income Tax Credits (EITCs). The expansion of state EITCs may have stemmed in large part from wanting to provide a more generous program than the federal program, because state EITCs increase transfer payments to low-Income recipients who qualify. However, state and local governments can also benefit from maximizing participation of their constituents in the federal EITC, and there are several reasons why state or local EITCs could increase participation in the federal EITC program. We find some evidence suggesting that state EITCs may increase federal EITC program participation among low-skilled single filers with children.
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Long-Run Effects of the Earned Income Tax Credit
FRBSF Economic Letter, 2020Co-Authors: David Neumark, Peter ShirleyAbstract:The Earned Income Tax Credit (EITC) substantially subsidizes earnings for low- to moderate-Income families with children in the United States. Research has established that the EITC has positive short-term effects on the employment of less-educated single mothers and reduces overall poverty. The EITC may also generate higher earnings in the long run, as the short-run positive employment effects for low-skilled women accumulate into greater labor market experience that makes them more productive.
Thomas F. Stinson - One of the best experts on this subject based on the ideXlab platform.
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Minnesota's Earned Income Credit Program: Utilization by Current and Former Welfare Households and the Impact of Policy Parameters
National Tax Journal, 2009Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:We examine the utilization of a state Earned Income credit by current and former welfare recipients using two measures: receipt among all current and former welfare recipients and among only those eligible for the credit. Both measures may be useful, depending upon which groups policymakers hope to target. We further characterize utilization by examining how receipt varies with earnings and by demographic group, the length of time current and former welfare households receive the state Earned Income credit, and whether recipient households respond to changes in the parameters to state Earned Income credit programs.
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Earned Income credit utilization by welfare recipients: A case study of Minnesota's Earned Income credit program
Journal of Policy Analysis and Management, 2006Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:This paper examines utilization of a state Earned Income credit by AFDC and TANF recipients. Although utilization percentages are increasing, we find that among TANF recipients in 1999, 45.7 percent of all households and 34.8 percent of eligible households did not receive the state Earned Income credit. Moreover, we find that utilization may depend upon TANF requirements and incentives, information resources, and barriers to work and filing of Income tax returns. Finally, we investigate whether low utilization is because of little or no benefit from the state Earned Income credit and find this may be true for some with barriers or less incentive to work under TANF. © 2006 by the Association for Public Policy Analysis and Management.
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URBAN AND RURAL DIFFERENCES IN UTILIZATION OF STATE Earned Income TAX CREDIT PROGRAMS: MINNESOTA'S EXPERIENCE
2004Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:This paper examines utilization rates of Minnesota's Earned Income tax credit program by households on welfare from 1992 through 1999. We examine urban and rural differences in the rate of filing an Income tax return and receiving the Earned Income tax credit. Tabulations show that urban areas have the lowest utilization rates, but are catching up in both Income tax filing rates and Earned Income credit receipt rates. Regression analyses identify correlates to urban-rural differences. A modeling exercise examines how urban and rural households might respond to a 10 percent increase in the credit. Finally, policy suggestions are offered, which are relevant to urban and rural areas and are appropriate for other states.
Katherine Williams - One of the best experts on this subject based on the ideXlab platform.
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do state Earned Income tax credits increase participation in the federal eitc
Public Finance Review, 2020Co-Authors: David Neumark, Katherine WilliamsAbstract:In recent years, many states and some local governments implemented or expanded their own supplemental Earned Income Tax Credits (EITCs). The expansion of state EITCs may have stemmed in large part from wanting to provide a more generous program than the federal program, because state EITCs increase transfer payments to low-Income recipients who qualify. However, state and local governments can also benefit from maximizing participation of their constituents in the federal EITC, and there are several reasons why state or local EITCs could increase participation in the federal EITC program. We find some evidence suggesting that state EITCs may increase federal EITC program participation among low-skilled single filers with children.
Donald P. Hirasuna - One of the best experts on this subject based on the ideXlab platform.
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Minnesota's Earned Income Credit Program: Utilization by Current and Former Welfare Households and the Impact of Policy Parameters
National Tax Journal, 2009Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:We examine the utilization of a state Earned Income credit by current and former welfare recipients using two measures: receipt among all current and former welfare recipients and among only those eligible for the credit. Both measures may be useful, depending upon which groups policymakers hope to target. We further characterize utilization by examining how receipt varies with earnings and by demographic group, the length of time current and former welfare households receive the state Earned Income credit, and whether recipient households respond to changes in the parameters to state Earned Income credit programs.
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Earned Income credit utilization by welfare recipients: A case study of Minnesota's Earned Income credit program
Journal of Policy Analysis and Management, 2006Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:This paper examines utilization of a state Earned Income credit by AFDC and TANF recipients. Although utilization percentages are increasing, we find that among TANF recipients in 1999, 45.7 percent of all households and 34.8 percent of eligible households did not receive the state Earned Income credit. Moreover, we find that utilization may depend upon TANF requirements and incentives, information resources, and barriers to work and filing of Income tax returns. Finally, we investigate whether low utilization is because of little or no benefit from the state Earned Income credit and find this may be true for some with barriers or less incentive to work under TANF. © 2006 by the Association for Public Policy Analysis and Management.
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URBAN AND RURAL DIFFERENCES IN UTILIZATION OF STATE Earned Income TAX CREDIT PROGRAMS: MINNESOTA'S EXPERIENCE
2004Co-Authors: Donald P. Hirasuna, Thomas F. StinsonAbstract:This paper examines utilization rates of Minnesota's Earned Income tax credit program by households on welfare from 1992 through 1999. We examine urban and rural differences in the rate of filing an Income tax return and receiving the Earned Income tax credit. Tabulations show that urban areas have the lowest utilization rates, but are catching up in both Income tax filing rates and Earned Income credit receipt rates. Regression analyses identify correlates to urban-rural differences. A modeling exercise examines how urban and rural households might respond to a 10 percent increase in the credit. Finally, policy suggestions are offered, which are relevant to urban and rural areas and are appropriate for other states.
John Karl Scholz - One of the best experts on this subject based on the ideXlab platform.
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The Earned Income Tax Credit
2001Co-Authors: V. Joseph Hotz, John Karl ScholzAbstract:Since its inception in 1975, the Earned Income Tax Credit (EITC) has grown into the largest, Federally-funded means-tested cash assistance program in the United States. In this chapter, we review the political history of the EITC, its rules and goals and provide a broad set of program statistics on its growth and coverage. We summarize conceptual underpinnings of much of the recent economic research on the EITC, discussing participation in the credit and compliance with its provisions, and its effects on labor force participation and hours of work, marriage and fertility, skill formation and consumption. We note that participation rates of the credit are high, rates of credit noncompliance are also high, and that there are theoretical reasons to prefer the EITC to other anti-poverty programs if one's objective is to encourage work among the poor. We also note that the predicted effects of the EITC are not all pro-work, especially with respect to hours and its labor market incentives for two-earner couples. We then summarize the existing empirical research on the behavioral effects of the EITC, paying particularly emphasis to the effects of the 1986, 1990 and 1993 expansions of the credit on labor force participation and hours of work. The literature provides consistent evidence, generated from a variety of empirical approaches, that the EITC positively affects labor force participation. The literature also finds smaller, negative effects on hours of work for people already in the labor market and for secondary workers. We conclude the chapter with a discussion of the ongoing EITC-related policy debates and highlight what, if any, critical economic issues underlie these debates.
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Evaluating work‐related cash benefit programs: The Earned Income Tax Credit
New Directions for Evaluation, 1998Co-Authors: Carolyn J. Hill, V. Joseph Hotz, John Karl ScholzAbstract:The Earned Income Tax Credit is expected to cost the federal government $27.1 billion in 1998, making it the largest cash or near-cash program available to low-Income families in the United States. Strategies most commonly employed to gain insight into the central issues of this tax credit include data sleuthing, simulations, natural experiments comparing participant and control groups, and cross-sectional econometric techniques.
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In-Work Benefits in the United States: The Earned Income Tax Credit
The Economic Journal, 1996Co-Authors: John Karl ScholzAbstract:The Earned Income tax credit (EITC) is or soon will be the largest cash or nearcash benefit provided to low-Income households in the United States.' The EITC is a credit on the federal Income tax available to working poor families with children. In I994 the credit equals 26-3 % of Earned Income (wages, salaries, self-employment Income, and farm Income) for taxpayers with one child, up to an Earned Income of $7,750; hence, the maximum benefit is $2,038 for families with one child. Because benefits increase with Earned Income (up to a certain point), the EITC seems to encourage work and therefore is a popular antipoverty programme. Taxpayers with one child and Incomes above $7,750 but below $i i,ooo receive the maximum benefit. Taxpayers with one child whose Incomes exceed $I I,ooo are in the phase-out range of the credit: their $2,038 credit is reduced by I5 98 cents for every dollar of Income Earned over and above $I I,ooo. Taxpayers with two or more children are entitled to a slightly larger credit ($2,528, or 30o0 %0 of $8,425), which is phased out at a I 7p68 0 rate. A small credit of at most $306 was available to childless taxpayers betnween the ages of 25 and 64 for the first time in I 994. Unlike most credits and deductions in the federal individual Income tax system, the EITC is refundable that is, if the amount of the credit exceeds what the taxpayer owes, he or she receives a payment from the US Treasury for the difference. The EITC was adopted in I975 and was originally promoted as a way to relieve the burden of the social security payroll tax on low-wage working parents.2 The original EITC equaled IO 0 of earnings up to a maximum credit of $400 for taxpayers with children, and was phased out at a rate of IO cents per dollar of earnings (or adjusted gross Income, whichever was higher) for Incomes between $4,ooo and $8,ooo. The EITC has been increased many times since I975, though the largest changes occurred in I990 and I993. In i996 when the I993 legislative changes are fully phased in, the credit rate will be 40 0 of earnings for families with two or more children and 34 0 for families
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The Earned Income Credit: Participation, Compliance, and Antipoverty Effectiveness
National Tax Journal, 1994Co-Authors: John Karl ScholzAbstract:Examines participation levels of persons eligible to receive the Earned Income credit, and analyzes how the 1993 tax act (which increases benefits) will increase participation levels.
