Helping Working Families : The Earned Income Tax Credit

by Hoffman, Saul D.; Seidman, Laurence S.

• ISBN13: 9780880992534
• ISBN10: 0880992530
• Format: Paperback
• Copyright: 2002-12-01
• Publisher: W E Upjohn Inst for

Author Biography

Saul D. Hoffman is a Professor of Economics and the Department Chair at the University of Delaware, where he has taught since 1977 Laurence S. Seidman is the Chaplin Tyler Professor of Economics at the University of Delaware, where he has taught since 1982

Table of Contents

List of Figures	ix
List of Tables	x
Acknowledgments	xiii
Introduction	1	(8)
An Overview of the Earned Income Tax Credit	9	(26)
A History of the EITC	11	(5)
Mechanics of the EITC	16	(4)
The EITC, the Child Tax Credit, and the Income Tax	20	(3)
Provisions of the 2001 EITC	23	(7)
The Tax Act of 2001	30	(1)
State EITC Plans	31	(2)
Summary	33	(1)
Notes	33	(2)
Who Benefits from the EITC?	35	(22)
Data and Methods	35	(3)
The EITC Recipient Population in 1996	38	(9)
Changes in the EITC Recipient Population	47	(1)
The Impact of the EITC on the Poverty Rate	48	(5)
Summary	53	(1)
Notes	54	(3)
The EITC and the Labor Market	57	(26)
Labor Supply and the EITC	57	(19)
The Impact of the EITC on Wage Rates	76	(4)
Summary	80	(1)
Notes	81	(2)
The EITC and the Family	83	(22)
Marriage Bonuses and Penalties	84	(11)
Marriage Penalty Reform in the 2001 Tax Act	95	(1)
Does the EITC Affect Marriage?	96	(5)
Summary	101	(1)
Notes	101	(4)
The EITC and Other Antipoverty Programs	105	(14)
The Minimum Wage	106	(6)
The Welfare System	112	(3)
Other Approaches	115	(2)
Summary	117	(1)
Notes	118	(1)
The Efficiency Cost of the EITC	119	(22)
Triest's Study of an EITC Expansion	122	(7)
Browning's Study of an EITC Expansion	129	(5)
Liebman's Study of the EITC	134	(3)
Concluding Comments	137	(1)
Notes	138	(3)
EITC Compliance Issues	141	(12)
The EITC Error Rate	141	(9)
New Initiatives to Reduce the EITC Error Rate	150	(2)
Conclusions	152	(1)
Reforming the EITC	153	(48)
A Proposed Reform of the EITC	153	(23)
Our Proposed EITC, the Child Tax Credit, and the Income Tax	176	(5)
Should the EITC and the Child Tax Credit Be Combined?	181	(4)
Should the EITC, the CTC and the Dependent Exemption be Combined?	185	(3)
Comparison with Other EITC Reform Proposals	188	(2)
The EITC Reform Adopted in the 2001 Tax Act	190	(2)
Improving EITC Compliance	192	(5)
Summary	197	(1)
Notes	198	(3)
The EITC in the Twenty-first Century	201	(4)
Appendix A: The Algebra of the Earned Income Tax Credit	205	(2)
Appendix B: The Effect of the EITC on Labor Supply: An Indifference Curve and Budget Constraint Approach	207	(14)
Appendix C: The Efficiency Cost of the EITC	221	(4)
Appendix D: Variations on Proposed EITC Reform	225	(4)
Reference List	229	(8)
The Authors	237	(2)
Index	239	(6)
About the Institute	245