Earned Income Tax Credit Recipients: Income, Marginal Tax Rates, Wealth, and Credit Constraints

30 Pages Posted: 16 Dec 2012

See all articles by Kartik Athreya

Kartik Athreya

Federal Reserve Banks - Federal Reserve Bank of Richmond

Devin Reilly

University of Pennsylvania - Department of Economics

Nicole B. Simpson

Colgate University - Economics Department

Date Written: 2010

Abstract

The Earned Income Tax Credit (EITC) has evolved into the largest anti-poverty program in the United States by providing tax credits for low and moderate income working families. In this paper, we describe the characteristics of EITC recipients at various ages using Current Population Survey data. In addition, we discuss the relevance of the EITC in affecting marginal income tax rates in the United States and discuss the effects of the EITC on household labor supply decisions. Lastly, using data from the Survey of Consumer Finances, we estimate wealth distributions for EITC recipients and analyze the extent to which EITC recipients are credit constrained.

Suggested Citation

Athreya, Kartik and Reilly, Devin and Simpson, Nicole, Earned Income Tax Credit Recipients: Income, Marginal Tax Rates, Wealth, and Credit Constraints (2010). FRB Richmond Economic Quarterly, vol. 96, no. 3, Third Quarter 2010, pp. 229-272. Available at SSRN: https://ssrn.com/abstract=2189107

Kartik Athreya (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Devin Reilly

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

Nicole Simpson

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States
315-228-7991 (Phone)

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