This series of papers examines the ways that federal tax policy could improve the economic prospects of low- and middle-income working families, particularly those living in cities. Over the past 15 years, federal tax policy has come to play a central role in the well-being of these families. As a result, the significant link between federal tax policies and the welfare of households in cities is an area of growing awareness and increasing importance.

The papers show that 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, could improve economic opportunities and incentives for working families, including the millions who live in urban areas.

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