Newsletter Archive

August 11, 2005

TAX POLICY TO HELP WORKING FAMILIES

• Project Overview

PAPERS IN THIS SERIES

• Introduction and Overview
• Child Care
• The Saver's Credit
• Health Insurance
• Homeownership

Project Website

Over the last fifteen years, federal social policy has migrated to the tax side of the budget. At the same time, there is growing awareness in urban areas that the biggest impacts of federal policy may not come from direct grants but rather through tax polices that affect urban households.

In light of these developments, the Tax Policy Center has just completed a project, financed by the John D. and Catherine T. MacArthur Foundation, to examine how federal tax policy could improve the economic prospects of low- and middle-income working families in cities. We show how existing federal tax rules affect these families, and that a variety of public policies are available to provide better economic opportunities and incentives for these households. In particular, policies that expand and modify the child care and dependent care tax credit, the saver's credit, and subsidies for health insurance, or that alter the structure of homeownership subsidies away from deductions and toward capped credits for homeownership, have the potential to improve economic prospects for millions of working families who live in urban areas. The significant link between federal tax policies and the welfare of households in cities is an area of growing awareness and increasing importance and should receive the attention of both urban leaders and federal policy makers in the future.

Papers In the Series

Introduction and Overview

This paper shows how existing federal tax rules affect working families in cities, and that a variety of public policies are available to provide better economic opportunities and incentives for these households.

• Discussion Paper: Tax Policies to Help Working Families in Cities.

Child Care

This paper examines the most recent changes to the Child and Dependent Care Tax Credit and offers two options for making the CDCTC more valuable to low-income families: making the credit refundable, and increasing the credit rate.

• Discussion Paper: Tax Subsidies to Help Low-Income Families Pay for Child Care
• Issues and Options Brief: Tax Credits to Help Low-Income Families Pay for Child Care

The Saver's Credit

This paper reviews the limited experience to date with the saver's credit--designed to promote tax-qualified retirement saving for moderate- and lower-income workers--and assesses various options for strengthening the credit.

• Discussion Paper: Improving Tax Incentives for Low-Income Savers: The Saver's Credit
• Issues and Options Brief: Making the Tax System Work for Low-Income Savers

Health Insurance

This paper examines implications of major expansions in tax credits for health insurance, starting with the President's refundable tax credit proposal.

• Discussion Paper: Tax Credits for Health Insurance
• Issues and Options Brief: Tax Credits for Health Insurance

Homeownership

This paper focuses on several reforms that would deliver ownership subsidies more equitably and efficiently to households at lower income levels.

• Discussion Paper: Making Tax Incentives for Homeownership More Equitable and Efficient
• Issues and Options Brief: How to Better Encourage Homeownership

Other Newsletters