On the progressivity of the child care tax credit: Snapshot versus time-exposure incidence

Rosanne Altshuler, Amy Ellen Schwartz

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

We evaluate the progressivity of the federal Child Care Tax Credit using the Ernst and Young/ University of Michigan panel of tax return data. Incidence measures are calculated using both annual and "time-exposure" income to measure ability to pay. Both indicate that the benefits of the credit are progressively distributed. Replacing annual with time-exposure income dramatically increases the proportion of the credit received by lower-income taxpayers and yields a more even distribution of benefits across middle- and upper-income taxpayers. Our results suggest that policymakers should use both income measures to evaluate the credit.

Original languageEnglish (US)
Pages (from-to)55-71
Number of pages17
JournalNational Tax Journal
Volume49
Issue number1
StatePublished - Mar 1 1996
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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