Journal of Economic Perspectives: Vol. 4 No. 3 (Summer 1990)


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

Article 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


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.

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Steuerle, C. Eugene (Urban Institute)

JEL Classifications

911: General Welfare Programs
323: National Taxation, Revenue, and Subsidies


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