Statement of Wendell Primus, Director of Income Security,
Center on Budget and Policy Priorities

Testimony Before the House Committee on Ways and Means

Hearing on President's Tax Relief Proposals that Affect Individuals

March 21, 2001

Mr. Chairman and Members of the Committee on Ways and Means:

Thank you for the opportunity to testify today on two aspects of President Bush's tax plan -- the expansion of the child tax credit and marriage penalty relief.⁽¹⁾ My name is Wendell Primus, and I am Director of Income Security at the Center on Budget and Policy Priorities. The Center is a nonpartisan, nonprofit policy organization that conducts research and analysis on a wide range of issues affecting low- and moderate-income families. We are primarily funded by foundations and receive no federal funding.

My testimony is divided into four sections. The first part of my testimony discusses the design of the Administration's expansion of the child tax credit. The second section addresses the question of whether a tax bill should benefit families raising children that do not currently pay federal income taxes. The third section examines other options for improving the tax code and assisting the working poor that are not reflected in the Administration proposal. The final section assesses the issue of marriage penalties.

I. Child Tax Credit Expansion is Inappropriately Designed

Under the Bush tax plan, the current child tax credit of $500 per child is doubled to $1,000 by 2006. Nearly all families that owe no federal income tax will fail to benefit from this expansion.⁽²⁾ For a family with two children, eligibility for the child tax credit under current law ends at $130,000 of income for a married family with two children. The Bush plan would extend this limit to $300,000 for such a family.

Many Children Would Not Benefit from Expansion of the Credit

As a result of this design, an estimated 12.2 million low- and moderate-income families with children -- 31.5 percent of all families with children -- would not receive any tax reduction from the Bush proposal.⁽³⁾ Approximately 24.1 million children -- 33.5 percent of all children -- live in these families. The vast majority of left-out families include workers.

Approximately two-thirds of the children excluded from the expansion -- a total of almost 16 million children -- live in families where earnings exceed $5,150, an amount equivalent to working 20 hours per week throughout the year at the minimum wage rate.

Over One-Half of Minority Children Left Out of Bush Tax Plan

Among African-Americans and Hispanics, the figures are especially striking. While one-third of all children would not benefit from the Bush tax credit expansion, more than half of black and Hispanic children would not receive any assistance.

• An estimated 55 percent of African-American children and 56 percent of Hispanic children live in families that would receive nothing from the tax cut.

• Of the 24.1 million children living in families that would receive no benefit from the tax cuts, an estimated 10.1 million are non-Hispanic whites, 6.1 million are black, and 6.5 million are Hispanic.

In Many States, Families of One-Third to One-Half of Children Do Not Benefit

We have also estimated the number of families and children who would receive no assistance from the Bush tax plan on a state-by-state basis. As Appendix Table 1 shows, the figures indicate that throughout the country there would be substantial numbers of children left out of the plan. In some states, very high numbers of children and families would receive no benefit.

• An estimated 3.7 million children in California, 2.3 million children in Texas, 1.9 million children in New York, and 1.2 million children in Florida, along with their families, would receive no benefit from the tax proposal. In each of another eight states -- Arizona, Georgia, Illinois, Michigan, North Carolina, Ohio, Pennsylvania, and Tennessee -- the families of half a million children, or more, would fail to gain from the tax cut plan.

• Approximately 52 percent of children in New Mexico live in families that would not benefit under the tax proposal. Other states in which approximately 40 percent to 50 percent of children live in families that would not benefit include Alabama, Arizona, Arkansas, California, Georgia, Idaho, Louisiana, Mississippi, Montana, New York, North Dakota, Tennessee, Texas, and West Virginia, plus the District of Columbia. Not surprisingly, because the families that would be left out of the Bush plan are those with incomes below the poverty line or modestly above it, these states tend to have relatively high levels of child poverty.

The Bush Child Tax Expansion Particularly Benefits Higher-Income Families

While the proposal to double the child tax credit would be of little or no help to millions of children in low-income working families, it would provide the largest tax reductions to families with incomes above $110,000 and confer a much larger share of its benefits on upper-income families than on low- and middle-income families. The chart below illustrates this. A married family of $25,000 with two children gets nothing under the Bush child tax credit proposal, while such a family with $150,000 will receive $2,000 just from the child credit provision.

• Married families with two children in the $110,000 to $250,000 range would receive an increase in the child tax credit of more than $500 per child. For many of these taxpayers, the child credit would rise from zero under current law to $1,000 per child under the Administration's plan.

This is because the Bush proposal extends the child tax credit to many families with high incomes that currently receive no credit, an outcome reflecting two aspects of the Bush plan. The plan both increases the point at which the child credit begins to phase out and slows the rate at which it phases out.

Under current law, the credit for a married family with two children phases out between $110,000 and $130,000. Under the Bush plan, when fully in effect starting in 2006, the credit for such a family would phase out between $200,000 and $300,000. This means that for a married family with two children:

• All such families with incomes between $110,000 and $300,000 would get a larger credit than under current law.

• All such families with incomes between $130,000 and $300,000 would be made eligible for the credit for the first time.

• All such families with incomes between $130,000 and $200,000 would receive a gain of $1,000 per child under the Administration's proposal, for a total of $2,000; under current law they do not receive a credit.

The precise point at which the credit would drop back to zero would vary by the number of children in the family. The more children in the family, the longer it would take for the credit to phase out. If, for example, a high-income family has three children, the family's new child tax credit of $3,000 would phase out between $200,000 and $350,000. There are approximately three million children in higher income families who would benefit from the proposed increase in the income eligibility limit for the child tax credit.

In crafting its proposal to expand the child tax credit, the Administration faced a choice. It could propose increasing the size of the credit without explicitly changing which families are covered by it; it could propose extending the credit to more low- and moderate-income families; it could propose extending the credit to more low- and moderate-income families and to high-income families; or it could extend the credit only to high-income families. The Administration selected the fourth option. As a consequence, Center calculations based on data from the Institution on Taxation and Economic Policy data indicate that when the increase in the child credit is fully in effect, the 20 percent of families with children with the highest incomes would receive about 35 percent of the new tax cuts. The bottom 40 percent of families with children would receive less than 10 percent of the tax cuts.

Democratic Proposal Excludes Many Fewer Children

By expanding the Earned Income Tax Credit, the Democratic alternative tax cut proposal would extend assistance to many of the working families that will be left out of the Administration's proposal. Because the EITC is refundable, this approach would reach a greater share of children.

As the figure shows, the percent of children left out under the Democratic proposal is less than half the number left out under the Bush option. Some 14 percent of children live in families that would benefit under the Democratic alternative, as compared to 34 percent under the Administration's plan. Appendix Table 1 shows the differences in coverage by state. In almost every state, the Democratic alternative leaves out less than half as many children as the Bush plan.

II. Should Families with Children That Do Not Pay Federal Income Taxes Benefit from Tax Reduction Legislation?

The estimated cost of the child tax credit expansion over the next 10 years is $193 billion. The President has indicated that the rationale for expanding the child tax credit is not simply tax relief but "to help families rear and support their children." He also has placed a special emphasis on reducing marginal tax rates. This section will discuss why working families that do not pay federal income taxes should benefit from the tax legislation.

Many single mother families have responded to welfare reform by working harder.
Yet their overall income gains have been small. They deserve an income boost.

A major theme of welfare reform has been to prod, assist, and enable families to work their way out of poverty. There is considerable evidence that welfare reform -- in combination with a strong economy (low unemployment rates, increasing real wages) and "make work pay" policies (an expanded EITC and increased child care expenditures) -- has significantly increased employment rates among single mothers and expanded their earnings. An analysis of Census data⁽⁴⁾ shows that female-headed families in the second-poorest fifth of female-headed families (the 1.8 million families with incomes between 86 percent and 127 percent of the poverty line in 1999) increased their earnings on average by $4,574 between 1995 and 1999, after adjusting for inflation, an increase of more than 70 percent. Yet their disposable income increased only $1,555. Only one-third of their earnings gains were reflected in disposable income gains.

Female-headed families in the middle fifth (the 1.8 million families with incomes between 127 percent and 173 percent of the poverty line) had a similar experience. In the context of a strong economy, they responded to welfare reform and the "make work pay" policies by working more and earning an additional $4,550. Yet their disposable income increased by less than 40 percent of their earnings increase. It seems appropriate that these families receive an income boost.

Most of these families, however, will receive no income gain from the child credit expansion. No additional children will be removed from poverty as a result of the Bush tax plan. In contrast, approximately 200,000 additional children would be removed from poverty by the Democratic plan.

A study by the Manpower Demonstration Research Corporation finds that improving income -- and not just employment -- is important if the lives of children in poor families are to improve.⁽⁵⁾ The MDRC report examined five studies covering 11 different welfare reform programs. The report's central finding was that increased employment among the parents in a family did not by itself significantly improve their children's lives. It was only in programs where the parents experienced increased employment and increased income that there were positive effects -- such as higher school achievement -- for their elementary school-aged children.

The Bush approach fails to reduce the high marginal tax rates that many low-income families face.

Throughout the presidential campaign and early into the new Presidency, President Bush and his advisors have cited the need to reduce the high marginal tax rates that many low-income working families face as one of their tax plan's principal goals. They have observed that a significant fraction of each additional dollar these families earn is lost as a result of increased income and payroll taxes and the phasing out of the EITC.⁽⁶⁾ Yet a large number of low-income families that confront some of the highest marginal tax rates of any families in the nation would not have their marginal rates reduced at all by the Bush plan.

Analysts across the ideological spectrum, including the Joint Tax Committee on Taxation⁽⁷⁾ and the Congressional Budget Office, have long recognized that the working families who gain the least from each additional dollar earned are those with incomes between about $13,000 and $20,000. For each additional dollar these families earn, they lose up to 21 cents in the EITC, 15.3 cents in payroll taxes (including the employer share), 24 cents to 36 cents in food stamp benefits, and additional amounts if they receive housing assistance or a child care subsidy on a sliding fee scale, are subject to state income taxes, or have to pay income-related premiums for health insurance. Their marginal tax rates are well above 50 percent. Yet the Bush plan provides no marginal tax rate relief to them.

To a large extent, these high marginal tax rates are one of the reasons the income gains between 1995 and 1999 shown previously are so small relative to the earnings increases. (Another part of the reason is that in many instances, these families no longer receive food stamp and cash benefits to which they remain entitled.)

The table above is illustrative. It shows the income gains as earnings increase by $5,000 for a single mother with two children in Maryland. These examples (which are similar in other states) show that the implicit tax rates faced by these families are very high. If the purpose of the major provisions in the Bush tax cut is to decrease marginal tax rates for low-income working families, why don't the families facing the highest marginal tax rates in the nation receive any marginal rate reductions?

Many of these families owe federal taxes other than federal income taxes, often paying significant amounts

Since the reason that millions of families and their children would not benefit from the Bush plan is that they do not owe federal income taxes, some have argued it is appropriate that they not benefit. "Tax relief should go to those who pay taxes" is the short-hand version of this argument. This line of reasoning is not persuasive for several reasons.

First, for most families, the biggest federal tax burden by far is the payroll tax, not the income tax. Data from the Congressional Budget Office show that in 1999, three-fourths of all U.S. families paid more in payroll taxes than in federal income taxes. (This comparison includes both the employee and employer shares of the payroll tax; most economists concur that the employer's share of the payroll tax is passed along to workers in the form of lower wages. This is also the approach used by CBO and the Joint Committee on Taxation.) Among the bottom fifth of households, 99 percent pay more in payroll than income taxes. Low-income families also pay federal excise taxes and state and local taxes, which are discussed further on the next page. While the Earned Income Tax Credit offsets these taxes for working poor families, many families with incomes close to or modestly above the poverty line who would not benefit from the Bush plan are net taxpayers.

For example, a married family with two children and income of $25,000 would pay $3,825 in payroll taxes (again, counting both the employee and employer share) and lesser amounts in gasoline and other excise taxes. The family pays various state taxes as well. The family would receive an Earned Income Tax Credit of $1,500, well under half of its payroll taxes. As a result, even if just payroll taxes and the EITC are considered, the family's net federal tax bill would be $2,325. Nonetheless, this family would receive no tax cut under the Bush plan.

Low and moderate-income families in every state pay state and local taxes, often paying a larger percentage of income in such taxes than higher-income families.

Families with incomes below or near the poverty line bear substantial state and local tax burdens. These taxes commonly include sales taxes, excise taxes on such items as gasoline, property taxes (passed on by landlords to tenants in the form of increased rent), various tax-like fees, and sometimes state-or locality-specific taxes such as local taxes on wages. In addition, many states have income taxes that tax families at lower income levels than the federal income tax does. The Institute on Taxation and Economic Policy estimates that state and local taxes equal anywhere from eight percent to 17 percent of the income of an average low-income married couple, depending on the state. Furthermore, these burdens are inequitably distributed; in almost every state, lower-income families pay a larger share of their incomes in state and local taxes than higher-income families do.⁽⁸⁾

Although some states have taken steps to reduce the burden of taxes on low-income families in recent years, they are limited in their ability to do so. States that for many years have levied the sales, excise and property taxes that are most burdensome on the poor cannot simply eliminate those taxes without dramatic effects on state budgets. In addition, it can be cumbersome for states to target relief to poor families that are burdened by these taxes. For example, the sales tax is collected by merchants from consumers without regard to their income level, and property taxes are passed through from property owners to renters as part of a rent payment.⁽⁹⁾ Moreover, states with higher levels of poverty often have the least fiscal resources with which to pay for tax relief for low-income families.

These state and local taxes that poor families pay often help finance federally required services or joint federal-state programs. For instance, state contributions to Medicaid typically are financed in whole or in part by general fund taxes such as state sales taxes and excise taxes.  Similarly, state contributions to federal highway construction often are financed by gasoline and other motor vehicle taxes. In part because these and other federal programs rely on state and local taxes, it can be appropriate for the federal government to administer tax relief that helps offset the burden of those taxes.

III. Assisting Low- and Moderate-Income Families with Children

If a large tax cut is enacted, it should include, rather than leave out, low- and moderate-income families with children. The Committee could benefit low- and moderate-income working families in the following ways.

Make the child tax credit partially refundable

This could be done in a variety of ways. For example, a family with children might receive a tax credit of five percent to 15 percent of earnings up to the maximum credit per child.. This would insure that low-income families with earnings receive assistance in raising their children. If a partially refundable child tax credit equal to 10 percent of earnings were enacted up to a maximum of $1,000 per child, only seven percent of children would be excluded from receiving any benefit. Some 1.1 million more children would be removed from poverty if the credit were designed in this fashion. In addition, this approach would lower implicit marginal tax rates significantly and give those mothers who responded to welfare reform an important income boost.

An alternative approach is one suggested by Belle Sawhill and Adam Thomas of the Brookings Institution.⁽¹⁰⁾ This would provide a credit of 15 percent of earnings above $8,000. Such a structure encourages full-time employment and offsets some of the marginal taxes incurred by low-income working parents as they become ineligible for means-tested benefits.

Expansion of Earned Income Tax Credit

One important proposal is to provide a larger EITC benefit for families with three or more children. Congressman Cardin and others introduced this approach last year in the House. Senators Hatch, Jeffords, Breaux, and Rockefeller have advanced such proposals in the Senate. This idea is not a new one; in Wisconsin, a bipartisan group of state legislators designed and secured passage of a substantially larger EITC for families with three or more children a decade ago. Then-governor Tommy Thompson signed that legislation into law and has championed the Wisconsin EITC.

Recent research indicates the EITC has a powerful effect in increasing employment among single female parents and also that the EITC lifts more children out of poverty than any other program or category of programs. Nevertheless, the official poverty rate remains 24 percent for children in families with three or more children and 19 percent when the EITC and various non-cash benefits are counted. In both cases, this is more than double the poverty rate among children in smaller families.

Another useful proposal is to lower the EITC phase-out rate. As I pointed out earlier, families with two or more children earning between $13,000 and $20,000 face especially high marginal tax rates. The Administration's plan fails to reduce the marginal tax rates of these families because it does not expand refundable tax credits.

One approach the Administration could have taken in assisting these working poor families with high marginal tax rates would have been to reduce the rate at which the EITC phases down for families in this income range.⁽¹¹⁾ For families with two or more children that earn between $13,000 and $22,000, the phase-out rate could, for example, be reduced from 21 percent to 16 percent. For families with two or more children who have earnings above $22,000, the phase-out rate would remain at its current level. If this approach is coupled with EITC marriage penalty relief (described below), these EITC improvements would reduce marginal tax rates for a large share of low-income working families that face high marginal tax rates today and would get no relief from the high rates under the Administration's plan.

An alternative approach to reducing implicit marginal tax rates would be to link the phase-out of the EITC to the point where food stamp eligibility ends.

Other Important Steps to Help the Working Poor

Additional steps would help states in the next stage of welfare reform and support recipients as they make the transition from welfare to work. Funds to reduce the vast disparities in TANF resources available to states through supplemental grants are needed. Another important step that would benefit low-income working families would be to enact H.R. 4678, the Child Support Distribution Act of 2000, which passed the House last year by a vote of 405-18. H.R. 4678 would greatly improve and simplify the child support distribution system and ensure that children benefit more when their non-custodial parents pay child support.

Expanding health care coverage is another important way to support the working poor. Research has shown that expanding state Medicaid programs to cover parents also increases the number of low-income children protected by health insurance. Congress should consider expanding funding for the State Children's Health Insurance Program (SCHIP) and allow states to use SCHIP funds to extend coverage (either through Medicaid or through separate state programs) to low-income working parents (including noncustodial parents who pay child support), along with their children. This approach is preferable to a modest refundable tax credit for the purchase of health insurance.

IV. Marriage Penalties

The rise in the number of unwed mothers receiving low-income assistance over the last several decades and the increase in cohabitation has motivated policy-makers to question whether welfare and tax policies influence a range of decisions about family formation, including decisions to marry, have children, or cohabit. Conservatives (and liberals) have been troubled by these trends for many years.

About one-third of births in this country are to unmarried women. New research indicates that in approximately 40 percent to 50 percent of cases, those out-of-wedlock babies come home to a two-parent but unmarried family.⁽¹²⁾ Based upon data from the Urban Institute, about half of these children live in families below 150 percent of the poverty level. The question is whether the tax and transfer system is creating incentives to form single-parent, cohabiting, or married families. The issue is not solely whether the families become married but also their choice of living together or living separately.

In a recent paper that I co-authored with Jennifer Beeson, we examined carefully the economic incentives in the entire tax and transfer system between those three choices for couples with children. Contrary to popular wisdom, the transfer system does not treat two-parent married families differently from two-parent unmarried families that have a child in common.

When economies of scale and the child support system are taken into account, this research shows that family income is maximized when the parents live together -- either married or unmarried. If the economic incentives favor living together, what about marriage? Among these lower-income families, our research indicates that the transfer system treats married families and cohabiting families with children about the same, but the tax code does not. It favors cohabitation over marriage in many instances because of the marriage penalty in the EITC.

Research suggests that marriage penalties and bonuses in the tax code have little effect on marriage rates at any income level. To the extent that studies find any effect of tax considerations on the decision to marry, the effect on marriage decisions for every tax dollar foregone has been found to be very small. In some of the latest research, Ellwood finds that the combination of the Earned Income Tax Credit and welfare reform has encouraged single parents to work but has had no discernible effect on marriage or cohabitation.⁽¹³⁾ Rosenbaum found that tax incentives may have an influence on decision to enter into marriage, but the magnitude of the effect is hard to measure. He also finds that it is unlikely that tax incentives influence a decision to end a marriage.⁽¹⁴⁾ Nevertheless, there is much we do not know in this area, and public policy needs to signal strongly what it believes is best for couples (and their children).

The chart below indicates that couples with lower earnings (the income range where cohabitation is most frequent) face the highest marriage penalties. Under current law, a couple where each adult earns $10,000 faces a marriage penalty of 4.2 percent of income; this increases to 4.5 percent of the couple's income when each adult earns $20,000. The couple where each adults makes $30,000 faces a marriage penalty of less than one percent of income.

President Bush's proposal to reduce marriage penalties by providing an additional deduction for two earner married couples does not affect low- and moderate-income working families that have no income tax liability. The Administration does not make any changes to the Earned Income Tax Credit, which is the primary source of marriage penalties for families in lower income ranges. If as a society we want to signal that marriage is the best solution for raising children, why would we ignore the cases where the marriage penalties are the greatest, and where cohabitation is the most prevalent?

In the last session of Congress, virtually every major tax bill providing marriage penalty relief -- including the bills that Congress passed and former President Clinton vetoed in 1999 and 2000 -- included a provision that reduced the marriage penalty for low- and moderate-income families receiving the EITC. Though the specifics were different, each bill reduced the marriage penalty in the EITC by increasing the income level where the EITC begins to phase-out for married couples, which is set under current law at $13,090 regardless of marital status. By raising this income level for married couples, the effect is to increase the amount of EITC a married couple can receive when its income falls in the phase-out range of the EITC schedule under current law.

• In 2000, the House increased the beginning of the EITC phase-out by $2,000 in H.R. 4810, while the Senate version of the same bill increased the beginning of the phase-out by $2,500. The conference report that passed both houses of Congress used the $2,000 increase from the House bill.

• In 1999, Congress increased the beginning of the EITC phase-out by $2,000 in its reconciliation tax bill (H.R. 2488).
• Democratic alternatives to these Republican tax bills also included increases in the EITC for married couples, as does the current Democratic alternative.

• The Heritage Foundation, in a recently published book, calls for a larger effort to shrink EITC marriage penalties and has called on policymakers to devote $5 billion a year for this purpose. Isabel Sawhill of the Brookings Institution and David Ellwood of Harvard also have called for larger efforts to reduce EITC marriage penalties than last year's bills would have made.

The Administration's plan departs from the bipartisan consensus formed in Congress over the past two years to reduce marriage tax penalties for low-wage working families, not just for middle- and upper-income families. This is a serious deficiency that is difficult to understand.

V. Conclusion

This analysis finds that one-third of children would not benefit from the expansion of the child tax credit. Yet these families pay taxes, and face high marginal tax rates in many instances. Similarly, the tax proposal provides no marriage penalty relief to many families that face the highest marriage penalties and does nothing to equalize the tax treatment of marriage and cohabitation (i.e., to stop favoring cohabitation over marriage) for families with children in the part of the income range where cohabitation rates are the highest. I would respectfully urge the Committee to design alternatives that address these shortcomings.

1. This testimony draws heavily upon the work of colleagues at the Center, including Isaac Shapiro, Iris Lav, Nicholas Johnson, Allen Dupree, and James Sly. The analysis in the following Center papers contributed significantly to this testimony: In Many States, One-Third to One-Half of Families Would Not Benefit from Bush Tax Plan, More Than Half of Black and Hispanic Families Would Not Benefit from Bush Tax Plan, and Alleviating Marriage Penalties in the EITC. All papers are available online at www.cbpp.org.

2. The exception is a limited number of cases including working families with three or more children that may claim some or all of the child credit as a refund. In such cases, the credit is limited to the amount by which the employee share of a family's payroll tax liability exceeds its EITC. IRS data show that only about 750,000 families benefitted from this provision in 1998.

3. The national estimates were prepared using the latest data (1999) from the Census Bureau. For the state estimates cited later, we used Census data from 1997, 1998, and 1999. The data for 1997 and 1998 were adjusted to simulate the current $500-per-child tax credit, and the combined data at the state level were slightly scaled to match nationwide estimates of the numbers of left-out families and children for 1999, the latest year for which CPS data are available. The resulting state-level figures may be considered accurate to within about 2 to 5 percent, depending on the state. For comparison, these figures are approximately as accurate as the U.S. Census Bureau's annual estimate of poverty rates by state, which also are based on three-year pooling of data.

4. For a complete description of how the analysis was performed, see Appendix Table 2.

5. Pamela A. Morris, et. al., How Welfare and Work Policies Affect Children: A Synthesis of Research, January 2001.

6. For example, for a family with two children, the size of the Earned Income Tax Credit is reduced by 21 cents for each dollar of income between $13,090 and $32,121.

7. Joint Committee on Taxation, Overview of Present Law and Economic Analysis Relating to Marginal Tax Rates and the President's Individual Income Tax Rate Proposals, JCX-6-01, March 6, 2001.

8. Institute on Taxation and Economic Policy, Who Pays?, 1996.

9. States that have income taxes do have the ability to enact refundable income tax credits that would help offset other taxes for poor families. Even the most generous such credits, however, offset only a portion of families' overall state and local tax burdens. In Minnesota, for instance, one of the two or three states that have made the most use of refundable tax credits and sales tax rebates, the Department of Revenue calculates that the overall state and local tax burden on low-income taxpayers exceeds 10 percent of income even after the credits and rebates are taken into account.

10. Isabel Sawhill and Adam Thomas, A Tax Proposal for Working Families with Children, Policy Brief No. 3, The Brookings Institution, January 2001.

11. Congressman Cardin and others proposed this change last year.

12. McLanahan, Sara, Irwin Garfinkel, and Marcia Carlson., The Fragile Families and Child WellBeing Study Baseline Report: Baltimore, Maryland, 2000.

13. Ellwood, David T, The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements, unpublished manuscript, 1999.

14. Rosenbaum, Dan, Taxes, the Earned Income Tax Credit, and Marital Status, presented at the ASPE/Census Bureau Small Grants Sponsored Research Conference, Washington, D.C., May 18-19, 2000.