Welfare by Any Other Name: Tax Transfers and the EITC
Dennis J. Ventry Jr.
University of California, Davis - School of Law
American University Law Review, Vol. 56, No. 5, 2007
American University, WCL Research Paper No. 08-12
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.
Number of Pages in PDF File: 21
Keywords: tax, tax policy, tax credits, poverty, welfare
Date posted: July 20, 2007 ; Last revised: August 7, 2008