The Effects of 1993 EITC Expansion on Marginal Tax Rates

Adireksombat, Kampon (2007): The Effects of 1993 EITC Expansion on Marginal Tax Rates. Published in: National Tax Journal - One Hundredth Annual Conference : pp. 307-315.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Earned Income Tax Credit, Unmarried Women, and Marginal Tax Rates
• Subjects: H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H31 - Household; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies

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