The Effects of 1993 EITC Expansion on Marginal Tax Rates

National Tax Journal Papers and Proceedings, One Hundredth Annual Conference, 2007

17 Pages Posted: 19 Sep 2008 Last revised: 4 Jun 2009

Kampon Adireksombat

Nanyang Technological University

Date Written: December 5, 2007

Abstract

The Earned Income Tax Credit (EITC) expansion affects labor supply and hence wages through changes in marginal tax rates (MTRs). This paper describes the effects of the 1993 EITC expansion on MTRs experienced by unmarried women. To demonstrate changes in MTRs, I use variation in the federal and state EITCs under the 1993 EITC expansion. Results suggest that the 1993 EITC expansion results in differential decreases in MTRs faced by unmarried women. Women with lower education experienced a larger decrease in their MTRs. Moreover, among women with the same education level, those with two or more children faced a larger decrease relative to those with one child and those with no children.

Keywords: Earned Income Tax Credit, Marginal Tax Rates

JEL Classification: H2

Suggested Citation

Adireksombat, Kampon, The Effects of 1993 EITC Expansion on Marginal Tax Rates (December 5, 2007). National Tax Journal Papers and Proceedings, One Hundredth Annual Conference, 2007. Available at SSRN: https://ssrn.com/abstract=1269160 or http://dx.doi.org/10.2139/ssrn.1269160

Kampon Adireksombat (Contact Author)

Nanyang Technological University ( email )

Blk S3-B1b-74
Nanyang Avenue
Singapore, 639798
Singapore
+65-6790-4778 (Phone)
+65-6794-6303 (Fax)

HOME PAGE: http://www.ntu.edu.sg/home/akampon

Paper statistics

Downloads
50
Abstract Views
437