Tax Policies to Help Working Families in Cities

Brief

Tax Policies to Help Working Families in Cities

Abstract

This paper examines how existing federal tax rules affect low- and middle-income working families in cities, and finds that several tax policy options could provide better economic opportunities and incentives for these households. Policies that expand and modify the child care and dependent care tax credit, the saver's credit, and subsidies for health insurance, or that alter the structure of homeownership subsidies away from deductions and toward capped credits for homeownership, could improve the welfare of millions of working families in cities, and should receive the attention of both urban leaders and federal policy makers in the future.

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