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

Athreya, Kartik B.; Reilly, Devin; Simpson, Nicole B.

Journal Article

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

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.

Keywords: Credit; Taxation;