Posts Tagged ‘low-income tax filers’

Why Tax and Transfer Programs Often Discourage Work and Savings

Economists and many policymakers generally agree that our tax and transfer systems should promote opportunity, work, saving, and education rather than consumption. The problem is these programs often penalize people for earning that extra dollar of income. Rather than promoting work and savings, these implicit taxes punish such otherwise positive behavior. These penalties occur in […]

Earned Income Tax Awareness Day

As tax filing season approaches, the IRS is reminding  low-income families about the Earned Income Tax Credit (EITC). The EITC provides a wage subsidy for low- and moderate-income families and is an important income support for many.  In 2012, a family with two children could receive an income boost of 40 cents for every dollar […]

Protecting the Child Tax Credit at the Fiscal Cliff

The Child Tax Credit (CTC), a key piece of the safety net for low- and moderate-income families, is in jeopardy as the nation hurtles towards the fiscal cliff. Not only could the 2001 expansion of the credit die, but so could provisions in the 2009 stimulus that made the credit much more available to low-income […]

Can Filing Taxes Connect Low-Income Families to Bank Services and Save the Government Money?

Is there a way for low- and moderate-income households who do not have bank accounts to receive tax refunds electronically? A new Urban Institute study found these households may be willing to participate in a program that delivers their refunds directly to a prepaid card account. We evaluated a Treasury Department pilot program called the […]

New Plan Expands EITC Benefits for Families with Young Children

The Earned Income Tax Credit (EITC) provides a significant income boost to low-income single-parent families, but can severely penalize those families if the parent marries. A new plan from Brooklyn College economist Robert Cherry could sharply reduce that problem while sharply increasing benefits for families with young children – particularly those with married parents. Analysts […]

Reduce Tax Rates on Low-Income Families by Extending Tax Phase-Outs

An ominous announcement for a House Ways & Means Committee joint hearing on “how welfare and tax benefits can discourage work” seemed a set-up to attack programs like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) for their apparent disincentive to work. But that’s not what happened.  Rather than eliminate or downsize […]

A New Urban Institute Calculator Shows What Taxes and Transfers Mean for Low-Income Families

State taxes and transfers can be an important form of assistance for low-income families. But the amount of government help varies widely among the states. And, importantly, so does what happens to those benefits when such a family increases its wages. To help understand how those tax and spending programs work, the Urban Institute has […]

Tax Policy in the Wrong Direction: Eliminating or Reducing State Income Tax

Oklahoma, Nebraska, and my home state of Kansas are debating proposals to sharply reduce or eliminate their personal income tax. That raises important questions about how they’ll make up the revenue. And it’s bad news for low-income families, who may end up paying higher taxes and losing critical safety net programs. In 2009 (the latest […]

Are Advanced Premium Assistance Tax Credits Workable?

In just a few years, the 2010 health reform law will begin providing subsidies to help low- and moderate-income people buy health insurance. And that assistance is supposed to be delivered through tax credits—with payments going directly from the IRS to insurance companies.  But will those credits actually work? Maybe, but it won’t be easy. […]

How Tariff Policy Undermines Other Tax Policy Goals

As someone who spends her time thinking about how taxes affect low-income families – and ways to make it more rational – I can’t say that I’ve ever gotten my feathers in a ruffle over tariff policy. Why bother, I suppose, when there are so many opportunities for reform in the income tax system? Apparently, […]