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Brief

Comparing the EITC and Child Tax Credit Proposals

Exploring Design Changes to Retarget Tax Credits

Elaine Maag, Robert McClelland, C. Eugene Steuerle
July 23, 2020
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Abstract

The earned income tax credit (EITC) and child tax credit (CTC) provide substantial benefits to working families with children. The EITC also provides modest benefits to workers without custodial children, often called “childless workers” for tax purposes. Together, the credits lift almost 9 million people out of poverty each year. In this brief, we summarize the fiscal cost and the distribution of benefits of four major Congressional proposals to expand these or similar benefits and how the share of benefits is distributed across income groups. We show how fiscal costs could be reduced and benefits better targeted to intended groups by altering key parameters in the proposals.

Research Area

Campaigns, Proposals, and Reforms Current legislative proposals Individual Taxes Child tax credit (CTC)/Child and dependent care tax credit (CDCTC) Earned income tax credit (EITC) Low-income households
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Meet the Experts

  • Elaine Maag
    Senior Fellow, Research
  • Robert McClelland
    Senior Fellow
  • C. Eugene Steuerle
    Institute Fellow and Richard B. Fisher Chair
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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