Welfare by Any Other Name: Tax Transfers and the EITC

21 Pages Posted: 20 Jul 2007 Last revised: 7 Aug 2008

Dennis J. Ventry Jr.

University of California, Davis - School of Law

Abstract

Tax credits, particularly refundable tax credits, are viewed increasingly as a social policymaking magic bullet. Indeed, the tax instrument can be a particularly effective and efficient mechanism for delivering social welfare benefits. However, deploying uniform refundable credits or universal tax subsidies will not solve all anti-poverty woes. In particular, over-reliance on the tax instrument blinds policymakers to a more fundamental conundrum that has plagued government transfers for over thirty years: What exactly is the government trying to accomplish by delivering social welfare benefits through the tax system? The Article explores this systemic question, and poses two further questions. First, what and who are policymakers targeting when they advocate tax-transfer programs like the EITC? And second, are current tax-transfer efforts effectively assisting the targeted beneficiaries? In addition, the Article examines the current political and administrative state of the EITC, and recommends several ways the program can further expand its reach and efficacy. In the process, it offers a sharp rebuttal to recent scholarship suggesting that the EITC is in political danger.

Keywords: tax, tax policy, tax credits, poverty, welfare

Suggested Citation

Ventry, Dennis J., Welfare by Any Other Name: Tax Transfers and the EITC. American University Law Review, Vol. 56, No. 5, 2007; American University, WCL Research Paper No. 08-12. Available at SSRN: https://ssrn.com/abstract=1001937

Dennis J. Ventry Jr. (Contact Author)

University of California, Davis - School of Law ( email )

UC Davis School of Law
400 Mrak Hall Drive
Davis, CA 95616-5201
United States
530-752-4566 (Phone)

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