scholarly journals Effective Marginal Tax Rates for Working for Families Recipients

1970 ◽  
Author(s):  
Phillip Spier
Keyword(s):  
Low Income ◽  
Tax Credits ◽  
Direct Result ◽  
Tax Rates ◽  
Work Incentives ◽  
Policy Changes ◽  
Marginal Tax Rates ◽  
Hours Of Work

This paper examines how the Working for Families (WFF) package changed work incentives for WFF recipient families. While not being able to examine work incentives directly, we were able to measure changes in effective marginal tax rates (EMTRs) for WFF recipients. The lower the EMTR a person faces, the more financially profitable it is for them to increase their hours of work or earnings. Conversely, a high EMTR over a range of earnings can be a disincentive for a person to work more. Beneficiary families and the vast majority of low income non­beneficiary families in receipt of WFF had lower EMTRs as a result of the policy changes. The April 2006 changes to the WFF package decreased EMTRs for middle­to­high income families already in receipt of WFF Tax Credits, but increased EMTRs for families who became newly eligible for this component as a direct result of the changes.

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)

scholarly journals Recent Changes in Federal Welfare Legislation and the Impact of Regional Economic Growth on Poverty, Dependency and Work Incentives: Some Findings

1985 ◽  
Vol 14 (1) ◽  
pp. 26-34
Author(s):  
Richard F. Bieker
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Regional Economic Growth ◽  
Tax Rates ◽  
Work Incentives ◽  
Regional Economic ◽  
Marginal Tax Rates ◽  
Poverty Status ◽  
Household Heads ◽  
The Impact

Regional economic growth based on private sector job creation is often proposed as a policy for reducing the incidence of regional unemployment, poverty and dependency. One factor that could limit the impact of economic growth on the employment and poverty status of an area's indigenous population is the area's public assistance system. This study evaluates the impact of recent changes in federal welfare legislation (HR 3982) on the work incentives and the poverty and dependency status of Delaware female household heads receiving Aid to Families with Dependent Children (AFDC) assistance. Specifically, the study estimates the implicit marginal tax rates that such household heads would face by accepting employment in private sector jobs to which they are potential entrants under the pre and post HR 3982 conditions. In addition, the study examines the effect of the HR 3982 changes on the poverty and dependency status of such households.

scholarly journals The Case for a Progressive Tax: From Basic Research to Policy Recommendation

2011 ◽  
Vol 25 (4) ◽  
pp. 165-190 ◽  
Author(s):  
Peter Diamond ◽  
Emmanuel Saez
Keyword(s):  
Low Income ◽  
Academic Research ◽  
Basic Research ◽  
Policy Recommendations ◽  
Tax Rates ◽  
Capital Income ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Marginal Tax Rates ◽  
Low Income Families

This paper presents the case for tax progressivity based on recent results in optimal tax theory. We consider the optimal progressivity of earnings taxation and whether capital income should be taxed. We critically discuss the academic research on these topics and when and how the results can be used for policy recommendations. We argue that a result from basic research is relevant for policy only if 1) it is based on economic mechanisms that are empirically relevant and first order to the problem, 2) it is reasonably robust to changes in the modeling assumptions, and 3) the policy prescription is implementable (i.e, is socially acceptable and not too complex). We obtain three policy recommendations from basic research that satisfy these criteria reasonably well. First, very high earners should be subject to high and rising marginal tax rates on earnings. Second, low-income families should be encouraged to work with earnings subsidies, which should then be phased-out with high implicit marginal tax rates. Third, capital income should be taxed. We explain why the famous zero marginal tax rate result for the top earner in the Mirrlees model and the zero capital income tax rate results of Chamley and Judd, and Atkinson and Stiglitz are not policy relevant in our view.

Estimates of Effective Marginal Tax Rates on Factor Incomes

1981 ◽  
Vol 54 (2) ◽  
pp. 191 ◽  
Author(s):  
Douglas H. Joines
Keyword(s):  
Tax Rates ◽  
Marginal Tax Rates
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