(Press-News.org) MADISON, Wis. – When the Earned Income Tax Credit was expanded in 1993, supporters hoped it would reward poor parents for working while critics feared that it might discourage single mothers from marrying or incentivize women to have more children to boost their tax refund.
A new collaborative study done by the University of Wisconsin-Madison and Cornell University reveals the EITC has helped the working poor but hasn't affected personal choices.
Sarah Halpern-Meekin, assistant professor of human development and family studies and affiliate of the Institute for Research on Poverty at UW–Madison, and co-author Laura Tach, assistant professor of policy analysis and management at Cornell, reported on interviews with 115 low-income tax filers in "Tax code knowledge and behavioral responses among EITC recipients," published in the Spring 2014 Journal of Policy Analysis and Management.
"Respondents consider their tax refund as a whole, without differentiating the portion from the EITC; as a result, they cannot predict how changes in their labor supply or marital status would affect their EITC refund," Halpern-Meekin and Tach wrote.
In 2010, nearly 27 million families received $59.5 billion from the EITC, helping an estimated 6.3 million people escape poverty — of which nearly half were children, according to the Center on Budget and Policy Priorities. In fact, the EITC has become the largest antipoverty program in the nation.
"We used in-depth interviews with EITC recipients to examine how they understand and respond to its incentive structures regarding earnings, marriage and childbearing," Halpern-Meekin says.
In the words of one of the respondents, a 25-year-old mother of three: "I mean, Earned Income Credit is nice, but it's not everything! I'm not going to let it factor into my marriage if I ever want to get married. I'm not marrying the Earned Income Credit. I'm marrying the man I love."
Most low-income workers said their job situations offered no chance to change work hours, even if they wished to.
"Workers in unstable jobs with little control over their schedules may find it difficult to control their total annual earnings in line with the incentives of the EIC schedule, and most do not know what those incentives are in the first place," the researchers wrote.
Rather than adjusting work hours, deferring marriage or having additional children, respondents alter their tax filing status in order to maximize their refunds, the report says.
One way workers saw to gain a little financial control of their lives was the federal government's W-4 Employee's Withholding Allowance Certificate. By claiming zero dependents and exemptions, anyone who wishes can maximize tax withholding from paychecks and may then reap a bigger refund when that money is returned to them at tax time.
Claiming zero is perfectly legal, but it's not always the best way to save because, unlike other savings options, the IRS pays zero interest. Trying to be nonjudgmental, the social scientists acknowledged the reasoning behind claiming zero: Out-of-sight, out-of-mind, those withheld dollars are safe — for months — from impulsive spending. Hefty refunds protect against the risk of owing money to the IRS at tax time and are something to look forward to for families who spend much of the year struggling to pay the bills.
INFORMATION:
Funding for the EITC study was provided by the Ford Foundation.
—Deborah Johnson, djohnson@ssc.wisc.edu, 608-262-7779
Single mothers don't delay marriage just to boost tax credit, study says
2014-04-10
ELSE PRESS RELEASES FROM THIS DATE:
Antennae help flies 'cruise' in gusty winds
2014-04-10
Due to its well-studied genome and small size, the humble fruit fly has been used as a model to study hundreds of human health issues ranging from Alzheimer's to obesity. However, Michael Dickinson, Esther M. and Abe M. Zarem Professor of Bioengineering at Caltech, is more interested in the flies themselves—and how such tiny insects are capable of something we humans can only dream of: autonomous flight. In a report on a recent study that combined bursts of air, digital video cameras, and a variety of software and sensors, Dickinson and his team explain a mechanism for ...
Enzyme revealed as promising target to treat asthma and cancer
2014-04-10
In experiments with mice, Johns Hopkins Kimmel Cancer Center scientists have identified an enzyme involved in the regulation of immune system T cells that could be a useful target in treating asthma and boosting the effects of certain cancer therapies.
In research described online April 6 in Nature Immunology, the investigators show that mice without the enzyme SKG1 were resistant to dust mite-induced asthma. And mice with melanoma and missing the enzyme, developed far fewer lung tumors—less than half as many—than mice with SKG1.
"If we can develop a drug that blocks ...
Researchers discover possible new target to attack flu virus
2014-04-10
Scientists at The University of Texas at Austin have discovered that a protein produced by the influenza A virus helps it outwit one of our body's natural defense mechanisms. That makes the protein a potentially good target for antiviral drugs directed against the influenza A virus.
Better antiviral drugs could help the millions of people annually infected by flu, which kills up to 500,000 people each year.
When an influenza virus infects a human cell, it uses some of the host's cellular machinery to make copies of itself, or replicate. In this study, the researchers ...
For sick, elderly patients, surgical decision making 'takes a village'
2014-04-10
Surgical decision making for sick, elderly patients should be orchestrated by a multidisciplinary team, including the patient, his or her family, the surgeon, primary care physician, nurses and non-clinicians, such as social workers, advocates Laurent G. Glance, M.D., in a perspective piece published in the New England Journal of Medicine.
For this group of patients, surgery can be very risky. Glance, professor and vice-chair for research in the Department of Anesthesiology at the University of Rochester School of Medicine and Dentistry believes a more patient-centered, ...
Medicare's flawed adjustment methodology poor way to spend billions
2014-04-10
Lebanon, N.H. (April 10, 2014) – The methodology Medicare uses to adjust the billions of dollars it pays health plans and hospitals to account for how sick their patients are is flawed and should be replaced, according to a new study by Dartmouth investigators published in the journal BMJ that weighed the performance of Medicare's methodology against alternatives.
The researchers from the Dartmouth Atlas Project compared Medicare's current risk-adjustment methodology, which is based on the diagnoses recorded in patients' claims records, against adjustment indices based ...
American College of Physicians releases policy paper on medical liability crisis
2014-04-10
Washington, DC, April 10, 2014 -- The American College of Physicians (ACP) today released a policy paper on the medical liability crisis, which continues to have a profound effect on the medical system. "Medical Liability Reform—Innovative Solutions for a New Health Care System" provides an update of the medical liability landscape, state-based activity on medical liability reform, and summarizes traditional and newer reform proposals and their ability to affect system efficiency and encourage patient safety.
"While medical liability premiums have leveled off in the ...
New cell models for tracking body clock gene function will help find novel meds
2014-04-10
PHILADELPHIA — The consequences of modern life -- shift work, cell phone addiction, and travel across time zones -- all disturb internal clocks. These are found in the brain where they regulate sleep and throughout the body where they regulate physiology and metabolism. Disrupting the clocks is called circadian misalignment, which has been linked to metabolic problems, even in healthy volunteers.
Researchers from the Perelman School of Medicine at the University of Pennsylvania and the University of Memphis describe in PLOS Genetics the development of new cell models ...
Tumor-suppressor connects with histone protein to hinder gene expression
2014-04-10
HOUSTON -- A tumor-suppressing protein acts as a dimmer switch to dial down gene expression. It does this by reading a chemical message attached to another protein that's tightly intertwined with DNA, a team led by scientists at The University of Texas MD Anderson Cancer Center reported at the AACR Annual Meeting 2014.
The findings, also published in the journal Nature on April 10, provide evidence in support of the "histone code" hypothesis. The theory holds that histone proteins, which combine with DNA to form chromosomes, are more intimately involved in gene expression ...
Study shows 'dinosaurs of the turtle world' at risk in Southeast rivers
2014-04-10
GAINESVILLE, Fla. --- Conservation of coastal rivers of the northern Gulf of Mexico is vital to the survival of the alligator snapping turtle, including two recently discovered species, University of Florida scientists say.
A new study appearing this week in the journal Zootaxa shows the alligator snapping turtle, the largest freshwater turtle in the Western Hemisphere and previously believed to be one species, is actually three separate species.
The limited distribution of the species, known to weigh as much 200 pounds, could potentially affect the conservation of ...
How widespread is tax evasion?
2014-04-10
Tax evasion is widely assumed to be an eternal problem for governments — but how widespread is it? For the first time, a new study, co-authored by an MIT professor, has put a cost on a particular kind of tax evasion, known as "round-tripping," that the U.S. government has been trying to thwart.
In round-tripping, U.S. investors move funds to offshore tax havens, then invest in U.S. equity and debt markets with these "foreign" funds. In essence, the U.S. investors are disguising themselves as foreign investors, who are not subject to the same tax rates on capital gains ...