Research by Author & Topic

Publications by Adam Carasso on Taxes and Social Programs

The Earned Income Tax Credit enjoyed marked success bringing low-income women into the labor force in recent years. At the same time, labor force participation by low-income or less-education men stagnated, and declined among young black men. In response to these labor market conditions, this paper analyzes several EITC reform options directed at increasing the EITC for low-income workers, in the hopes of drawing these men into the labor force. We estimate the cost of various proposals and put forth an additional proposal that breaks the EITC into two components – one focused on individual workers and one focused on supporting children.

Kids' Share 2008, a second annual report, looks comprehensively at trends in federal spending and tax expenditures on children. Key findings suggest that historically children have not been a budget priority. In 2007, this trend continued, as children's spending did not keep pace with GDP growth. Absent a policy change, children's spending will continue to be squeezed in the next decade.

Key Facts: Kids' Share 2008 summarizes findings from the Kids' Share 2008 report, which looks comprehensively at trends in federal spending and tax expenditures on children. Key findings suggest that historically children have not been a budget priority. In 2007, this trend continued, as children's spending did not keep pace with GDP growth. Absent a policy change, children's spending will continue to be squeezed in the next decade.

This report tallies all federal spending and tax subsidies aimed at promoting the economic mobility of Americans for 1980, 2006, and 2012. This first effort at defining a mobility budget--$746 billion in 2006--reaches two major conclusions: (1) poor and lower-income households owe little or no tax and so are excluded from the bulk of economic mobility programs, which are often delivered in the form of tax subsidies; and (2) while these households do benefit from many other federal programs, those programs generally are not aimed at promoting mobility--and sometimes even discourage it. Furthermore, under current law, mobility enhancing programs targeted to toward lower income households would decline as a share of GDP from 2006 to 2012, while those targeted to the better off would increase over the same period.

Individual giving to public charities-most of which comes in the form of charitable deductions from tax filers who itemize on their returns-actually comprises only a small part of charities’ gross receipts each year: between 8 and 12 percent of gross receipts over the 1996-2003 period.

The panoply of U.S. tax and transfer programs often act in concert to penalize low-income families who increase their work effort or marry, by saddling them with high effective marginal tax rates. These effective marginal tax rates-often the product of multiple, hidden phase-outs in benefit programs like the EITC, Food Stamps, and Medicaid-are often higher for low-to-middle income families with children earning between $10,000 and $40,000 than they are for more well-to-do families earning above, $90,000. Rates can be so high that families lose nearly a dollar in program benefits for every additional dollar of earnings income they bring in.

Widening access to retirement savings vehicles and increasing the accumulations within these vehicles could help secure the future for many lower-income families. Currently, the role played by private pensions in asset building is small to nonexistent for most poor and lower-middle class workers. Instead, these persons rely primarily on Social Security and the savings in their home equity, if any, to sustain them in retirement. This brief, based on feedback from a roundtable of experts convened at the Urban Institute, provides background data on the assets of US households and discusses options for increasing levels of saving and retirement security for low- and moderate-income families.

Over the past seventy years Congress has enacted dozens of tax and transfer programs, giving little if any attention to the marriage subsidies and penalties that they inadvertently impose. Although the programs affect both rich and poor Americans, the penalties fall most heavily on low- or moderate-income households with children. In this article, Adam Carasso and Eugene Steuerle review important penalties and subsidies, explain how they work, and help fill a big research gap by beginning to provide comprehensive data on the size of the penalties and subsidies arising from all public programs considered together. [© www.futureofchildren.org]

The way federal housing benefits are doled out suggests a U-shaped curve; subsidies are heaped on most households at higher incomes and some at very low incomes. Those in between get little. This brief describes revenue-neutral reforms that would level out the U-shaped curve and deliver ownership subsidies more equitably and efficiently to lower-to-middle-income households. Converting home-related tax deductions into refundable, capped credits introduces greater progressivity into the tax system, encourages homeownership among those at lower incomes, and curtails government subsidies for ever greater amounts of home borrowing.

The employer exclusion of contributions for medical insurance premiums and medical care from employee income taxes is the single largest tax expenditure in the federal budget, worth $112 billion in fiscal year 2005. Even when adjusting for growth in medical prices, the employer exclusion still grows in real terms between 1988 and 2002 (a 36 percent rise). Yet, as health tax expenditures for employer-sponsored insurance have grown, the uninsured population has also grown, both in absolute numbers and as a percentage of the nonelderly population.