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TJTC and the promise and reality of redistributive vouchering and tax credit policy

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  • Edward C. Lorenz

    (Associate Professor of History and Political Science at Alma College)

Abstract

The Targeted Jobs Tax Credit (TJTC) is a representative redistributive incentive. Initially, proponents saw TJTC as an elegant program, efficiently promoting labor market behavior that would solve the employment problems of many disadvantaged job seekers. However, interest groups distorted the credit into a windfall for businesses that hire large numbers of low wage workers. The policy theories incorporated into TJTC, which emphasized continual program reform and minimized program management by public administrators, provided a setting conducive to interest group distortion. Because few representatives of the disadvantaged participated in the oversight process, special interests undermined TJTC being reformed through empirical evaluation. This experience indicates that without major changes in the policy process, narrowly targeted rzdistributive policies should be avoided.

Suggested Citation

  • Edward C. Lorenz, 1995. "TJTC and the promise and reality of redistributive vouchering and tax credit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(2), pages 270-290.
    • Handle: RePEc:wly:jpamgt:v:14:y:1995:i:2:p:270-290
    DOI: 10.2307/3325153
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    References listed on IDEAS

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    Cited by:

    1. Raphael W. Bostic & Allen C. Prohofsky, 2006. "Enterprise Zones and Individual Welfare: A Case Study of California," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 175-203, May.
    2. Joel A. Elvery & C. Lockwood Reynolds & Shawn M. Rohlin, 2023. "Employer Wage Subsidy Caps and Part-Time Work," ILR Review, Cornell University, ILR School, vol. 76(1), pages 189-209, January.
    3. Kenneth A. Couch & Douglas J. Besharov & David Neumark, 2013. "Spurring Job Creation in Response to Severe Recessions: Reconsidering Hiring Credits," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(1), pages 142-171, January.
    4. Christine Ryan & John Wilson & William Fulton, 2003. "The Impact of Urban Growth Boundaries on Future Urbanization," Working Paper 8610, USC Lusk Center for Real Estate.
    5. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
    6. Olugbenga Ajilore, 2012. "Did the Work Opportunity Tax Credit Cause Subsidized Worker Substitution?," Economic Development Quarterly, , vol. 26(3), pages 231-237, August.
    7. Maria Figueroa-Armijos & Thomas G. Johnson, 2016. "Entrepreneurship policy and economic growth: Solution or delusion? Evidence from a state initiative," Small Business Economics, Springer, vol. 47(4), pages 1033-1047, December.
    8. Elizabeth J. Mueller & Alex Schwartz, 1998. "Leaving Poverty through Work: A Review of Current Development Strategies," Economic Development Quarterly, , vol. 12(2), pages 166-180, May.

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