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Simplicity: Considerations in Designing a Unified Child Credit

Maag, Elaine

Abstract:

Complexity plagues the tax code for low-income families, particularly with regard to child related credits. Many analysts advocate separating out the essential functions of these credits: subsidizing work, subsidizing children, and subsidizing specific activities such as child care. This paper analyzes design considerations in creating a unified child credit and offers options for reforms that range from a complete overhaul of the child and work incentives to a more minor consolidation of highly related tax incentives. Either could form the foundation for reform efforts aimed at simplifying and rationalizing the federal income tax code with respect to children.

Citation

Maag, Elaine (2010), Simplicity: Considerations in Designing a Unified Child Credit, National Tax Journal, 63:4, pp. 765-80

DOI: dx.doi.org/10.17310/ntj.2010.4.09