'Secondary Evasion' and the Earned Income Tax Credit
41 Pages Posted: 19 Nov 2003
There are 2 versions of this paper
'Secondary Evasion' and the Earned Income Tax Credit
'Secondary Evasion' and the Earned Income Tax Credit
Date Written: August 17, 2004
Abstract
This paper documents that the earned income of taxpayers claiming the earned income tax credit (EITC) tends to cluster within $800 intervals surrounding the kink points of the EITC benefit distribution. This clustering is especially strong for head of household taxpayers around the kink point of the phase-in range and, to a lesser extent, for married filing joint taxpayers around the kink point of the phase-out range. The results from logit regression models estimated by filing status and kink point location indicate that "secondary evasion" with respect to the EITC is more associated with the characteristics of head of household taxpayers than those of married filing joint taxpayers.
Keywords: Earned Income Tax Credit, Tax Compliance, Kink Points
JEL Classification: H24, H26, M43
Suggested Citation: Suggested Citation
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