THE ANTIPOVERTY IMPACT OF THE EITC: NEW ESTIMATES FROM SURVEY AND ADMINISTRATIVE TAX RECORDS

Maggie R. Jones, James P. Ziliak

Research output: Contribution to journalArticlepeer-review

Abstract

We reassess the antipoverty effects of the earned income tax credit (EITC) using unique data linking the Current Population Survey (CPS) Annual Social and Economic Supplement to Internal Revenue Service (IRS) data for the same individuals spanning tax years 2005–2016. We compare EITC benefits from standard simulators to administrative EITC payments and find that the antipoverty estimates of the EITC are countercyclical in terms of number of recipients, with roughly four million people of all ages and 1.9 million children lifted from after-tax poverty in a typical year. We outline how researchers using public data can address discrepancies between survey estimates of the EITC and administrative tax records.

Original languageEnglish
Pages (from-to)451-479
Number of pages29
JournalNational Tax Journal
Volume75
Issue number3
DOIs
StatePublished - Sep 2022

Bibliographical note

Funding Information:
We thank the editors, three anonymous reviewers, and comments from Hilary Hoynes, Bruce Meyer, Jon Rothbaum, and seminar participants at the Association of Public Policy and Management Fall Research Conference, Society of Labor Economists Annual Conference, the US Census Bureau, Syracuse University, University of Illinois at Chicago, University of Kentucky, and University of Nevada–Las Vegas. We are also grateful for the assistance of Josh Mitchell on the internal Census files with TAXSIM and to Jon Bakija for sharing his tax simulator used in earlier versions of this paper. Any opinions and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the US Census Bureau. The statistical summaries reported in this paper have been cleared by the Census Bureau’s Disclosure Review Board release authorization numbers CBDRB-FY21-317, CBDRB-FY21-338, and CBDRB-FY2022-CES010-009. Research was performed under agreement TIRSE-14-M-00002 between the US Census Bureau and the Internal Revenue Service.

Publisher Copyright:
© 2022 National Tax Association.

Keywords

  • administrative data linkage
  • automatic stabilizer
  • poverty
  • tax policy

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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