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Earned income tax credit recipients: income, marginal tax rates, wealth, and credit constraints

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  • Kartik B. Athreya
  • Devin Reilly
  • Nicole B. Simpson

Abstract

The Earned Income Tax Credit (EITC) has evolved into the largest anti-poverty program in the United States by providing tax credits for low and moderate income working families. In this paper, we describe the characteristics of EITC recipients at various ages using Current Population Survey data. In addition, we discuss the relevance of the EITC in affecting marginal income tax rates in the United States and discuss the effects of the EITC on household labor supply decisions. Lastly, using data from the Survey of Consumer Finances, we estimate wealth distributions for EITC recipients and analyze the extent to which EITC recipients are credit constrained.

Suggested Citation

  • Kartik B. Athreya & Devin Reilly & Nicole B. Simpson, 2010. "Earned income tax credit recipients: income, marginal tax rates, wealth, and credit constraints," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 229-258.
  • Handle: RePEc:fip:fedreq:y:2010:i:3q:p:229-258:n:v.96no.3
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    References listed on IDEAS

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    Cited by:

    1. John Schmitt, 2012. "Low-wage Lessons," CEPR Reports and Issue Briefs 2012-03, Center for Economic and Policy Research (CEPR).
    2. repec:eee:socmed:v:194:y:2017:i:c:p:67-75 is not listed on IDEAS
    3. Nathaniel G. Hilger, 2016. "Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 247-283, July.
    4. Carol Osler & Thang Nguyen & Tanseli Savaser, 2011. "Asymmetric Information and the Foreign-Exchange Trades of Global Custody Banks," Department of Economics Working Papers 2011-09, Department of Economics, Williams College.
    5. Simpson, Nicole B., 2013. "Families, Taxes and the Welfare System," IZA Discussion Papers 7369, Institute for the Study of Labor (IZA).
    6. Sara Markowitz & Kelli A. Komro & Melvin D. Livingston & Otto Lenhart & Alexander C. Wagenaar, 2017. "Effects of State-Level Earned Income Tax Credit Laws in the U.S. on Maternal Health Behaviors and Infant Health Outcomes," NBER Working Papers 23714, National Bureau of Economic Research, Inc.

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    Keywords

    Credit ; Taxation;

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