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

1990 ◽  
Vol 4 (3) ◽  
pp. 201-212 ◽  
Author(s):  
C. Eugene Steuerle
Keyword(s):  
Child Care ◽  
Low Income ◽  
The United States ◽  
Tax Credits ◽  
Tax Credit ◽  
Dependent Care ◽  
Goods And Services ◽  
Equity And Efficiency ◽  
Households With Children ◽  
Child Tax Credit

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.

Moving Forward with the Earned Income Tax Credit and Child Tax Credit: Analysis of Proposals to Expand Refundable Tax Credits

2020 ◽  
Vol 73 (4) ◽  
pp. 1163-1186
Author(s):  
Elaine Maag ◽  
Nikhita Airi
Keyword(s):  
Low Income ◽  
Income Tax ◽  
Large Scale ◽  
The Elderly ◽  
Earned Income Tax Credit ◽  
Tax Credits ◽  
Tax Credit ◽  
Earned Income ◽  
Low Income Children ◽  
Child Tax Credit

Policymakers grapple with the related issues of unequal incomes, relatively poor health, education, and economic outcomes for low-income children, and hardship among low- and moderate-income families. Refundable tax credits provide substantial support and relief to many. This analysis details who benefits from the earned income tax credit (EITC) and the child tax credit (CTC) and four large-scale tax credit proposals that would provide substantial and ongoing benefits through these or similar credits. Broadly, proposals focused on children exclude childless adults and the elderly, and proposals focused on work exclude nonworkers, including most of the elderly, but include many workers with children.

The United States

2018 ◽  
Author(s):  
Joshua T. McCabe
Keyword(s):  
Child Poverty ◽  
The United States ◽  
Tax Credits ◽  
National Commission ◽  
Tax Credit ◽  
Tax Relief ◽  
The Us ◽  
The Uk ◽  
Poor Children ◽  
Child Tax Credit

Chapter 6 looks at how the National Commission on Children brought attention to the problem of child poverty in the US, leading to the expansion of the Earned Income Tax Credit in 1993 and the introduction of the nonrefundable Child Tax Credit in 1997. In contrast to the cases of Canada and the UK, the growth of these tax credits, tracing their legacy to the dependent exemption in the tax system, was premised on the logic of tax relief rather than the logic of income supplementation. Originally, the National Commission on Children released recommendations for a fully refundable Child Tax Credit as the best way to tackle child poverty. This served as a successful springboard in Canada and the UK. This was not the case in the US, where the logic of tax relief remained dominant. Initial attempts to introduce a fully refundable Child Tax Credit quickly failed. Policymakers and the public deemed poor children undeserving of tax credits because their parents were not technically taxpayers.

scholarly journals Efficient Child Care Subsidies

2020 ◽  
Vol 110 (1) ◽  
pp. 162-199 ◽  
Author(s):  
Christine Ho ◽  
Nicola Pavoni
Keyword(s):  
Child Care ◽  
Low Income ◽  
The United States ◽  
Tax Rates ◽  
Child Care Subsidies ◽  
Optimal Program ◽  
The Us ◽  
Marginal Tax Rates ◽  
Welfare Problem ◽  
Care Costs

We study the design of child care subsidies in an optimal welfare problem with heterogeneous private market productivities. The optimal subsidy schedule is qualitatively similar to the existing US scheme. Efficiency mandates a subsidy on formal child care costs, with higher subsidies paid to lower income earners and a kink as a function of child care expenditure. Marginal labor income tax rates are set lower than the labor wedges, with the potential to generate negative marginal tax rates. We calibrate our simple model to features of the US labor market and focus on single mothers with children aged below 6. The optimal program provides stronger participation but milder intensive margin incentives for low-income earners with subsidy rates starting very high and decreasing with income more steeply than those in the United States. (JEL D82, H21, H24, J13, J16, J32)

Year 15 and the Preservation of Low-Income Housing Tax Credit Projects: Lessons from Detroit, Michigan

2020 ◽  
pp. 0739456X2096221
Author(s):  
Lan Deng
Keyword(s):  
At Risk ◽  
Low Income ◽  
Tax Credits ◽  
Tax Credit ◽  
Institutional Actors ◽  
National Housing ◽  
Low Income Housing

This study examines the efforts to preserve the Low-Income Housing Tax Credits (LIHTC) projects that are at risk from their year-15 transition in Detroit, Michigan. Using the preservation framework recommended by the National Housing Trust, the paper first identifies the risks LIHTC projects in Detroit face. It then reports what major institutional actors in LIHTC developments have done in addressing those risks, with particular attention to the roles these actors have played in shaping preservation needs and actions. The study concludes by discussing what broader lessons can be learned from Detroit with regard to the preservation of LIHTC projects nationwide.

Child Care and Child Care Policy: Existing Policies, Their Effects, and Reforms

2019 ◽  
Vol 686 (1) ◽  
pp. 310-338 ◽  
Author(s):  
V. Joseph Hotz ◽  
Matthew Wiswall
Keyword(s):  
United States ◽  
Child Care ◽  
Low Income ◽  
Maternal Employment ◽  
The United States ◽  
Care Services ◽  
Children And Parents ◽  
Provide Child Care ◽  
Policies And Programs ◽  
Low Income Mothers

We analyze policies that support and affect the provision and costs of child care in the United States. These policies are motivated by at least three objectives: (1) improving the cognitive and social development of young children, (2) facilitating maternal employment, and (3) alleviating poverty. We summarize this policy landscape and the evidence on the effects they have on the development of children and parents. We provide a summary of the use and costs of nonparental child care services; and we summarize existing policies and programs that subsidize child care costs, provide child care to certain groups, and regulate various aspects of the services provided in the United States. We then review the evidence on the effects that child care policies have on these objectives. We go on to discuss the existing evidence of their effects on various outcomes. Finally, we outline three reform proposals that will both facilitate work by low-income mothers and improve the quality of child care that their children receive.

Child Tax Credit in Divorced Families

2009 ◽  
Vol 7 (1) ◽  
pp. 90-98
Author(s):  
Valrie Chambers ◽  
Anthony P. Curatola
Keyword(s):  
Tax Planning ◽  
Tax Credit ◽  
Earned Income ◽  
Divorced Families ◽  
Dependent Care ◽  
The Past ◽  
Head Of Household ◽  
Federal Income Tax ◽  
The Cost ◽  
Child Tax Credit

ABSTRACT: For more than 50 years, Congress has responded to the needs of families with various tax breaks ranging from exemptions, the adoption of Head of Household status, Child and Dependent Care Credit, increased Earned Income Credit (EIC) for those with dependent children, and the Child Tax Credit. With so many different tax breaks, tax planning for divorced parents has been dynamic and at times confusing. Part of the confusion originates from the intent of the special tax rules for divorced couples, divorce decrees, and federal income tax laws. This confusion was exacerbated with the passage of the Child Tax Credit, which is intended to aid parents in the cost of raising a child. Yet, Congress tied the tax credit to the dependency exemption and not to the person who actually cares for the child of divorced or separated parents. Although Congress has tinkered with this policy over the past few years, they still have failed to fix the problem. In fact, we contend that this latest round of legislation has increased the likelihood of additional litigation between former spouses.

Housing

Getting By ◽  
2019 ◽  
pp. 635-730
Author(s):  
Helen Hershkoff ◽  
Stephen Loffredo
Keyword(s):  
Public Housing ◽  
Low Income ◽  
The United States ◽  
Tax Credits ◽  
Housing Assistance ◽  
New Public ◽  
Housing Rights ◽  
Federal Housing ◽  
New Construction ◽  
Private Owner

This chapter discusses the major federal programs providing rental and homeownership assistance to poor and low-income people. On the supply side, for decades the United States has not funded new Public Housing that it owns and manages; instead, tax credits are the major driver of new construction, with buildings owned and operated by private developers who commit to time-limited affordability requirements. On the demand side, the leading rental support program gives tenants “vouchers,” allowing them choice where they can live but no guarantee that a landlord will rent to them at the subsidized payment levels. Moreover, many households, and disproportionately people of color, have been or continue to be arbitrarily denied rental assistance because of a family member’s prior contact with the criminal justice system, even just an arrest—a policy that has caused great hardship and contributed to homelessness. For those tenants who receive it, federal housing assistance is a critical lifeline. This chapter focuses on how prospective tenants can apply for and maintain eligibility for Public Housing or subsidized units in Multifamily Programs, and how to obtain and keep a voucher. The chapter also discusses issues critical to housing justice—tenant participation in assisted housing; rights of tenants when a private owner leaves an assisted program; housing support for the homeless; the government’s duty to affirmatively further fair housing; and problems of environmental displacement.

Quality of Child Care as an Aspect of Family and Child Care Policy in the United States

PEDIATRICS ◽  
1993 ◽  
Vol 91 (1) ◽  
pp. 182-188
Author(s):  
Sandra Scarr ◽  
Deborah Phillips ◽  
Kathleen McCartney ◽  
Martha Abbott-Shim
Keyword(s):  
United States ◽  
Child Care ◽  
Low Income ◽  
The United States ◽  
Child Care Policy ◽  
Care Policy ◽  
Working Families ◽  
Low Income Families ◽  
The Impact

The quality of child care services in the United States should be understood within a context of child care policy at the federal and state levels. Similarly, child care policy needs to be examined within the larger context of family-support policies that do or do not include parental leaves to care for infants (and other dependent family members) and family allowances that spread the financial burdens of parenthood. Maynard and McGinnis1 presented a comprehensive look at the current and predictable policies that, at federal and state levels, affect working families and their children. They note the many problems in our "patchwork" system of child care—problems of insufficient attention to quality and insufficient supply for low-income families. Recent legislation is a step toward improving the ability of low-income families to pay for child care (by subsidizing that part of the cost of such care which exceeds 15% rather than 20% of the family income) and some steps toward training caregivers and improving regulations. They note the seeming political impasse over parental leaves, even unpaid leaves, and the impact of this lack of policy on the unmet need for early infant care. We should step back from the current morass of family and child care policies in the United States and look at what other nations have done and continue to do for their working families. By comparison with other industrialized countries in the world, the United States neglects essential provisions that make it possible for parents in other countries to afford to rear children and to find and afford quality child care for their children.

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