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The EITC Marriage Tax and EITC Reform

Author

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  • Saul D. Hoffman

    (Department of Economics, University of Delaware)

Abstract

The Earned Income Tax Credit (EITC) provides marriage bonuses to some married couples and imposes marriage penalties on many others. The sources of these bonuses and penalties are the EITC eligibility rules, its non-linear benefit structure, and the phase-out of benefits at higher incomes. In this paper, we examine the source of the EITC marriage penalty, simulate the impact on the EITC marriage penalty of the reform included in the Economic Growth and Tax Relief Act of 2001, and then propose and examine additional reform that would both provide further relief from the EITC marriage penalty and improve labor supply incentives at the same time.

Suggested Citation

  • Saul D. Hoffman, 2003. "The EITC Marriage Tax and EITC Reform," Working Papers 03-01, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:03-01
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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2003/UDWP2003-01.pdf
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    References listed on IDEAS

    as
    1. McCubbin, Janet, 2000. "EITC Noncompliance: The Determinants of the Misreporting of Children," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1135-1164, December.
    2. James Alm & Stacy Dickert-Conlin & Leslie A. Whittington, 1999. "Policy Watch: The Marriage Penalty," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 193-204, Summer.
    3. Alm, James & Whittington, Leslie A., 1997. "Income taxes and the timing of marital decisions," Journal of Public Economics, Elsevier, vol. 64(2), pages 219-240, May.
    4. Janet Holtzblatt & Robert Rebelein, 2000. "Measuring the Effect of the EITC on Marriage Penalties and Bonuses," JCPR Working Papers 127, Northwestern University/University of Chicago Joint Center for Poverty Research.
    5. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1063-1106, December.
    6. McCubbin, Janet, 2000. "EITC Noncompliance: The Determinants of the Misreporting of Children," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1135-64, December.
    7. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1063-1106, December.
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    Cited by:

    1. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(1), pages 101-128, February.

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    More about this item

    Keywords

    EITC;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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