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Research report

A Universal EITC: Making Work Pay in the Age of Automation

Leonard E. Burman
January 21, 2021
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Abstract

The universal earned income tax credit is a worker subsidy designed to offset wage stagnation. The base proposal would replace existing subsidies for working families with a refundable 100 percent tax credit on individual wages up to $10,000 and a larger, refundable child tax credit. The maximum credit grows with gross domestic product, guaranteeing that low-wage workers benefit from economic growth. The credits are offset by a broad-based value-added tax or income surtax. The proposals are progressive: After-tax income for the bottom quintile would increase by about 25 percent. The tax burden on the top 1 percent would increase by 7–14 percent of income, depending on financing.

This paper was originally published in the December 2020 edition of the National Tax Journal.

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Individual Taxes
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Meet the Experts

  • Leonard E. Burman
    Institute Fellow
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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