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Working
Paper Series:
07.20
The U.S. Earned Income Tax Credit, its Effects, and Possible Reforms
Bruce D. Meyer
http://www.harrisschool.uchicago.edu/faculty/web-pages/bruce-meyer.asp
Abstract:
In this paper, I first summarize how the U.S. Earned Income Tax Credit (EITC) operates
and describe the characteristics of recipients. I then discuss empirical work on the effects
of the EITC on poverty and income distribution, and its effects on labor supply. Next, I
discuss a few policy concerns about the EITC: possible negative effects on hours of work
and marriage, and problems of compliance with the tax system. I then briefly discuss
some possible reforms to the structure of the current EITC.
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