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 language | English (US) |
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Pages (from-to) | 1187-1218 |
Number of pages | 32 |
Journal | National Tax Journal |
Volume | 73 |
Issue number | 4 |
DOIs | |
State | Published - Dec 2020 |
Keywords
- CTC
- EITC
- Inequality
- UBI
- VAT
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics