A Universal EITC: Making work pay in the age of automation

Research output: Contribution to journalArticlepeer-review

Abstract

The universal earned income tax credit is a worker subsidy designed to offset wage stagnation. The base proposal would replace existing subsidies for working families with a refundable 100 percent tax credit on individual wages up to $10,000 and a larger, refundable child tax credit. The maximum credit grows with gross domestic product, guaranteeing that low-wage workers benefit from economic growth. The credits are offset by a broad-based value-added tax or income surtax. The proposals are progressive: After-tax income for the bottom quintile would increase by about 25 percent. The tax burden on the top 1 percent would increase by 7–14 percent of income, depending on financing.

Original languageEnglish (US)
Pages (from-to)1187-1218
Number of pages32
JournalNational Tax Journal
Volume73
Issue number4
DOIs
StatePublished - Dec 2020

Keywords

  • CTC
  • EITC
  • Inequality
  • UBI
  • VAT

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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