Anne L. Alstott

THE EARNED INCOME TAX CREDIT AND THE LIMITATIONS OF TAX-BASED WELFARE REFORM

The earned income tax credit (EITC), which uses the federal income tax system to provide an earnings subsidy to low-income workers, has enjoyed support across the political spectrum as a pro-work, pro-family alternative to traditional welfare programs. Advocates of the EITC also claim that the EITCs tax-based administration is cheaper and less stigmatizing than traditional welfare administration. In this Article, I argue that the case for the EITC has been oversimplified in two significant ways. First, the Article argues that both advocates and opponents of the EITC place undue emphasis on whether it discourages work and marriage. The conventional policy debate over the EITCs behavioral incentives is too narrowly framed: the debate relies on incomplete economic analysis and reflects important but unacknowledged normative tensions.Second, the Article shows that the EITC, as a tax-based income-transfer program, faces institutional constraints not present in traditional welfare programs. Although economists and policy analysts have long advocated integration of the tax and transfer systems, they have overlooked the problems of inaccuracy, unresponsiveness, and noncompliance that are inherent in tax-based administration. Reforms might improve the EITCs performance, but such improvements would require either comprising the benefits of tax-based administration or undertaking a major restructuring of the federal income tax system. Absent such changes, the EITC and similar tax-based transfer are likely to prove widely acceptable only if we revise our expectations about accuracy, responsiveness, and compliance.

Tax Policy and Feminism: Competing Goals and Institutional Choices

Despite the dramatic increase in womens labor market participation in recent decades, women continue to perform a disproportionate share of family labor. Feminists have long been concerned that the gendered division of family labor reduces womens wages and circumscribes womens life choices and economic power.This article considers what tax policy might contribute to a feminist legal agenda that aims to redress the gendered division of labor. It argues that tax policy can make an important contribution but that some prior scholarship has overlooked the normative and institutional complexity of translating feminist goals into concrete policy prescriptions.

Work vs. Freedom: A Liberal Challenge to Employment Subsidies

This Article argues that employment subsidies could help ameliorate the situation of low-income workers but that they concede too much to the work-centered agenda that motivated the 1996 welfare legislation that enacted TANF. The case for employment subsidies, the Article argues, rests on mistaken but morally dubious claims about the intrinsic or instrumental value of paid work. By contrast, a program of unconditional cash grants would enhance the freedom and economic security of the least advantaged.The Article undertakes a detailed comparison of the justifications for and effects of employment subsidies and unconditional cash grants and argues that the latter would enhance the freedom of the poor, pave the way for labor-market reforms, and capture administrative savings.