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Research report

A Universal EITC: Sharing the Gains from Economic Growth, Encouraging Work, and Supporting Families

Leonard E. Burman
May 20, 2019
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Abstract

This report analyzes a straightforward mechanism to mitigate middle-class wage stagnation: a wage tax credit of 100 percent of earnings up to a maximum credit of $10,000, called a universal earned income tax credit. The child tax credit would increase from $2,000 to $2,500 and be made fully refundable. A broad-based, value-added tax of 11 percent would finance the new credit. The proposal is highly progressive and would nearly end poverty for families headed by a full-time worker. This report compares the proposal with current law, analyzes its economic effects, compares it to alternative reform options, and considers some complementary policy options.

Research Area

Campaigns, Proposals, and Reforms Fundamental reform proposals Individual Taxes Earned income tax credit (EITC) Income tax (individual) Low-income households Tax credits (individual) Unemployment taxes and compensation
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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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