The Effect of the Earned Income Tax Credit on Housing and Living Arrangements.

As rents have risen and wages have not kept pace, housing affordability in the United States has declined over the last 15 years, impacting the housing and living arrangements of low-income families. Housing subsidies improve the housing situations of low-income families, but less than one in four eligible families receive a voucher. In this article, we analyze whether one of the largest anti-poverty programs in the United States-the Earned Income Tax Credit (EITC)-affects the housing (eviction, homelessness, and affordability) and living arrangements (doubling up, number of people in the household, and crowding) of low-income families. Using the Current Population Survey, the American Community Survey/decennial census, and the Fragile Families and Child Wellbeing Study, we employ a parameterized difference-in-differences strategy to examine whether policy-induced expansions to the EITC affect the housing and living arrangements of single mothers. Results suggest that a $1,000 increase in the EITC improves housing by reducing housing cost burdens, but it has no effect on eviction or homelessness. Increases in the EITC also reduce doubling up (living with additional, nonnuclear family adults)-in particular, doubling up in someone else's home-and reduce three-generation/multigenerational coresidence, suggesting that mothers have a preference to live independently. We find weak evidence for a reduction in overall household size, yet the EITC does reduce household crowding. Although the EITC is not an explicit housing policy, expansions to the EITC are generally linked with improved housing outcomes for single mothers and their children.

Does the earned income tax credit increase children's weight? The impact of policy-driven income on childhood obesity.

I exploit substantial increases in the earned income tax credit to study how a policy-driven change in family income affects childhood obesity. Using the National Longitudinal Survey of Youth 1979, my difference-in-differences estimates indicate that the probability of being obese increased by 3 percentage points among children whose families experienced a greater income shock. A further investigation suggests that a reduction in maternal time with children played a greater role in children's weight gain than income. The paper's finding shows that a program that is not designed for health purposes, such as earned income tax credit, can have unintended effects on health outcomes.

What happens to the employment of disabled individuals when all financial disincentives to work are abolished?

Policymakers and organizations representing people with disabilities have highlighted the importance of promoting the employment prospects of disabled individuals as a determinant to ensure their broader integration into the society. Policy reforms that attempt to incentivise disabled individuals to work typically involve reduced financial punishments for earning above a predetermined threshold (substantial gainful activity). This paper exploits a Spanish reform that entirely eliminated any disincentives for disabled individuals to work. Partially disabled individuals in Spain are subject to income taxation in all regions except in the province of Bizkaia. Before 2007, partially disabled individuals in Bizkaia were exempt from income taxation if they did not work. In December 2006, a new law was passed in Bizkaia that distinguished between individuals aged 55 or younger, who were no longer tax-exempt, and those who were older than 55 years, who continued to be tax-exempt if they did not work. I exploit this change in the legislation and employ both a difference-in-difference strategy comparing the employment outcomes of disabled young men across provinces and time as well as a triple difference model with disabled men older than 55 years, who are unaffected by the policy. My results show that the reform increased the probability of working by 6.5 percentage points for disabled men aged 55 or younger.

Extending Marketplace Tax Credits Would Make Coverage More Affordable for Middle-Income Adults.

ISSUE: Affordability of health coverage is a growing challenge for Americans facing rising premiums, deductibles, and copayments. The Affordable Care Act's tax credits make marketplace insurance more affordable for eligible lower-income individuals. However, individuals lose tax credits when their income exceeds 400 percent of the federal poverty level, creating a steep cliff. GOALS: To analyze the effects of extending eligibility for tax credits to individuals with incomes above 400 percent of the federal poverty level. METHODS: We used RAND's COMPARE microsimulation model to examine changes in insurance coverage and health care spending. KEY FINDINGS AND CONCLUSIONS: Extending tax-credit eligibility increases insurance enrollment by 1.2 million, at a total federal cost of $6.0 billion. Those who would benefit from the tax-credit extension are mostly middle-income adults ages 50 to 64. These new enrollees would be healthier than current enrollees their age, which would improve the risk pool and lower premiums. Eliminating the cliff at 400 percent of the federal poverty level is one policy option that may be considered to increase affordability of insurance.

Modification of Treatment of Certain Health Organizations. Final regulations.

This document contains final regulations that provide guidance to Blue Cross and Blue Shield organizations, and certain other organizations, on computing and applying the medical loss ratio and the consequences for not meeting the medical loss ratio threshold. The final regulations reflect the enactment of a technical correction to section 833(c)(5) of the Internal Revenue Code by the Consolidated and Further Continuing Appropriations Act of 2015. The final regulations affect Blue Cross and Blue Shield organizations, and certain other organizations involved in providing health insurance.

Your Health Is Priceless.

Your health is priceless but health insurance can be expensive. As open enrollment begins, we show you how to avoid costly mistakes and still get the coverage you need.

Minimum Value of Eligible Employer-Sponsored Plans and Other Rules Regarding the Health Insurance Premium Tax Credit. Final regulations.

This document contains final regulations on the health insurance premium tax credit enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the Medicare and Medicaid Extenders Act of 2010, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, and the Department of Defense and Full-Year Continuing Appropriations Act, 2011. These final regulations affect individuals who enroll in qualified health plans through Affordable Insurance Exchanges (Exchanges, sometimes called Marketplaces) and claim the health insurance premium tax credit, and Exchanges that make qualified health plans available to individuals and employers.

Minimum essential coverage and other rules regarding the shared responsibility payment for individuals. Final regulations.

This document contains final regulations relating to the requirement to maintain minimum essential coverage enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the TRICARE Affirmation Act and Public Law 111-173 (collectively, the Affordable Care Act). These final regulations provide individual taxpayers with guidance under section 5000A of the Internal Revenue Code on the requirement to maintain minimum essential coverage and rules governing certain types of exemptions from that requirement.

After Piketty?

In this paper, I take Capital in the Twenty-First Century by Thomas Piketty as the starting point for a set of twelve policy proposals that could bring about a genuine shift in the distribution of income towards less inequality. In designing the set of proposals, I draw on the experience of reducing inequality in postwar Europe and on an analysis as to how the economic circumstances are now different in the twenty-first century, highlighting the role of technical change and the rise in capital emphasized by Piketty. The proposed measures span many fields of policy, and are not confined to fiscal redistribution, encompassing science policy, competition policy, public employment, a guaranteed return on small savings, a capital endowment, as well as more progressive taxation of income and wealth transfers, and a participation income. Inequality is embedded in our social structure, and the search for a significant reduction requires us to examine all aspects of our society. I focus on inequality within countries, and what can be achieved by national governments, with the UK specifically in mind. The primary audience is those concerned with policy-making in national governments, but implementation should not be seen purely in these terms. There are different levels of government, and certain proposals, particularly those concerned with taxation, may only be feasible if pursued by a group of countries in collaboration. The last of the twelve proposals - for a basic income for children - is specifically directed at the European Union. Finally, actions by individuals as consumers, as workers, or as employers, can all contribute to reducing inequality.

Can revenue collection for public funding in health care be progressive? An assessment of 29 Countries.

Most research on health care equity focuses on accessing services, with less attention given to how revenue is collected to pay for a country's health care bill. This article examines the progressivity of revenue collection among publicly funded sources: income taxes, social insurance (often in the form of payroll) taxes, and consumption taxes (e.g., value-added taxes). We develop methodology to derive a qualitative index that rates each of 29 high-income countries as to its progressivity or regressivity for each of the three sources of revenue. A variety of data sources are employed, some from secondary data sources and other from country representatives of the Health Systems and Policy Monitor of the European Observatory on Health Systems and Policies. We found that countries with more progressive income tax systems used more income-based tax brackets and had larger differences in marginal tax rates between the brackets. The more progressive social insurance revenue collection systems did not have an upper income cap and exempted poorer persons or reduced their contributions. The only pattern regarding consumption taxes was that countries that exhibited the fewest overall income inequalities tended to have least regressive consumption tax policies. The article also provides several examples from the sample of countries on ways to make public revenue financing of health care more progressive.

In-work tax credits for families and their impact on health status in adults.

BACKGROUND: By improving two social determinants of health (poverty and unemployment) in low- and middle-income families on or at risk of welfare, in-work tax credit for families (IWTC) interventions could impact health status and outcomes in adults. OBJECTIVES: To assess the effects of IWTCs on health outcomes in working-age adults (18 to 64 years). SEARCH METHODS: We searched 16 electronic academic databases, including the Cochrane Public Health Group Specialised Register, Cochrane Database of Systematic Reviews (The Cochrane Library 2012, Issue 7), MEDLINE and EMBASE, as well as six grey literature databases between July and September 2012 for records published between January 1980 and July 2012. We also searched key organisational websites, handsearched reference lists of included records and relevant journals, and contacted academic experts. SELECTION CRITERIA: We included randomised and quasi-randomised controlled trials and cohort, controlled before-and-after (CBA) and interrupted time series (ITS) studies of IWTCs in working-age adults. Included primary outcomes were: self rated general health; mental health/psychological distress; mental illness; overweight/obesity; alcohol use and tobacco use. DATA COLLECTION AND ANALYSIS: Two review authors independently extracted data and assessed the risk of bias in included studies. We contacted study authors to obtain missing information. MAIN RESULTS: Five studies (one CBA and four ITS) comprising a total of 5,677,383 participants (all women) fulfilled the inclusion criteria and were synthesised narratively. The in-work tax credit intervention assessed in all included studies is the permanent Earned Income Tax Credit in the United States, established in 1975. This intervention distributed nearly USD 62 billion to over 27 million individuals in 2011, and its administration costs were less than one per cent of its total costs. All included studies carried a high risk of bias (especially from confounding and insufficient control for underlying time trends). Due to the small number of (observational) studies and their high risk of bias, we judged this body of evidence to have very low overall quality.One study found that IWTC had no detectable effect on self rated general health and mental health/psychological distress five years after its implementation (i.e. a considerable change in the generosity of the permanent IWTC) and on overweight/obesity eight years after implementation. One study found no effect of IWTC on tobacco use five years after implementation, one a moderate reduction in tobacco use one year after implementation (odds ratio 0.95, 95% confidence interval (CI) 0.94 to 0.96), and one differential effects, with no effect in African-Americans and a large reduction in European-Americans two years after implementation (risk difference -11.1%, 95% CI -20.9% to -1.3%). No evidence was available for the effect of IWTC on mental illness and alcohol use. No adverse effects of IWTC were identified.One study also found no detectable effect of IWTC on the number of bad physical health days and of risky biomarkers for inflammation, cardiovascular disease and metabolic conditions eight years after implementation. One study found that IWTC had a large, positive effect on income from wages or salaries one year after implementation. Two studies found no effect on employment two and five years after implementation, whereas two found a moderate increase five and eight years after implementation and one a large increase in employment due to IWTC one year after implementation.No differences in outcomes between groups with different educational status were found for self rated health and mental health/psychological distress. In one study European-American women with lower levels of education were more likely to reduce tobacco use, while tobacco use did not change among African-American women with lower levels of education. However, no differences in tobacco use by educational status were observed in a second study. Two studies found that the intervention may have reduced inequity with respect to employment, where women with less education were more likely to move into employment (although one did not establish whether this difference was statistically significant), while two studies found no such difference and no studies found differences by ethnic group on employment rates. AUTHORS' CONCLUSIONS: In summary, the small and methodologically limited existing body of evidence with a high risk of bias provides no evidence for an effect of in-work tax credit for families interventions on health status (except for mixed evidence for tobacco smoking) in adults.

The fiscal consequences of ADHD in Germany: a quantitative analysis based on differences in educational attainment and lifetime earnings.

OBJECTIVE: To estimate the long-term fiscal consequences of attention deficit hyperactivity disorder (ADHD) on the German government and social insurance system based on differences in educational attainment and the resulting differences in lifetime earnings compared with non-ADHD cohorts. METHODS: Differences in educational attainment between ADHD and non-ADHD cohorts were linked to education-specific earnings data. Direct and indirect tax rates and social insurance contributions were linked to differences in lifetime, education-specific earnings to derive lost tax revenue in Germany associated with ADHD. For ADHD and non-ADHD cohorts we derived the age-specific discounted net taxes paid by deducting lifetime transfers from lifetime gross taxes paid. RESULTS: The lifetime net tax revenue for a non-ADHD individual was approximately EUR 80,000 higher compared to an untreated ADHD individual. The fiscal burden of untreated ADHD, based on a cohort of n=31,844 born in 2010, was estimated at EUR 2.5 billion in net tax revenue losses compared with an equally-sized non-ADHD cohort. ADHD interventions providing a small improvement in educational attainment resulted in fiscal benefits from increases in lifetime tax gains. CONCLUSIONS: ADHD results in long-term financial loss due to lower education attainment and lifetime reduced earnings and resulting lifetime taxes and social contributions paid. Investments in ADHD interventions allowing more children to achieve their educational potential may offer fiscal benefits generating a positive rate of return.

Shared responsibility payment for not maintaining minimum essential coverage. Final regulations.

This document contains final regulations on the requirement to maintain minimum essential coverage enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the TRICARE Affirmation Act and Public Law 111-173. These final regulations provide guidance to individual taxpayers on the liability under section 5000A of the Internal Revenue Code for the shared responsibility payment for not maintaining minimum essential coverage and largely finalize the rules in the notice of proposed rulemaking published in the Federal Register on February 1, 2013.

[Taxing unhealthy foods. A measure to promote public health in Germany?]. / Gesundheitssteuern auf Lebensmittel. Eine Maßnahme zur Förderung der Gesundheit in Deutschland?

Due to the substantial health burden and costs caused by malnutrition in Germany, for instance as a result of obesity, diabetes, and cardiovascular diseases, the taxation of unhealthy foods/nutrients has been proposed as a possible health promoting measure. In order to evaluate whether such a fiscal intervention constitutes an effective and suitable measure to promote population health in Germany, the article outlines central empirical findings regarding malnutrition in Germany. Subsequently, the economic background (price elasticity of demand) is explained, and empirical evidence on the influence of changes in price on changes in consumption and health is presented. As a result of findings from the international literature being heterogeneous, and because very little research has been conducted in Germany on this matter until now, the taxation/subsidization of foods in order to promote population health is difficult to justify at this point.

A choice mind-set increases the acceptance and maintenance of wealth inequality.

Wealth inequality has significant psychological, physiological, societal, and economic costs. In six experiments, we investigated how seemingly innocuous, culturally pervasive ideas can help maintain and further wealth inequality. Specifically, we tested whether the concept of choice, which is deeply valued in American society, leads Americans to act in ways that perpetuate wealth inequality. Thinking in terms of choice, we argue, activates the belief that life outcomes stem from personal agency, not societal factors, and thereby leads people to justify wealth inequality. The results showed that highlighting the concept of choice makes people less disturbed by facts about existing wealth inequality in the United States, more likely to underestimate the role of societal factors in individuals' successes, less likely to support the redistribution of educational resources, and less likely to support raising taxes on the rich-even if doing so would help resolve a budget deficit crisis. These findings indicate that the culturally valued concept of choice contributes to the maintenance of wealth inequality.

The welfare gain from replacing the health insurance tax exclusion with lump-sum tax credits.

This paper analyzes the welfare gain from replacing the tax exclusion of employer-provided health insurance with a lump-sum tax credit. It differs from earlier studies in that we look at the welfare cost of health insurance tax exclusion as coming directly from excessive health insurance rather than from overconsumption of medical care and that we account for the labor market effect of the tax exclusion on welfare. Both differences work to produce a smaller tax reform welfare gain. For a set of mid-range parameter values, the welfare gain is about 21% of current health insurance tax expenditures. In addition, government tax expenditures would fall by 38%, and health insurance spending would fall by 77% after the reform.

Tax reform options: promoting retirement security.

TAX PROPOSALS: Currently, the combination of worker and employer contributions in a defined contribution plan is capped by the federal tax code at the lesser of $49,000 per year or 100 percent of a worker's compensation (participants over age 50 can make additional "catch-up" contributions). As part of the effort to lower the federal deficit and reduce federal "tax expenditures," two major reform proposals have surfaced that would change current tax policy toward retirement savings: A plan that would end the existing tax deductions for 401(k) contributions and replace them with a flat-rate refundable credit that serves as a matching contribution into a retirement savings account. The so-called "20/20 cap," included by the National Commission on Fiscal Responsibility and Reform in their December 2010 report, "The Moment of Truth," which would limit the sum of employer and worker annual contributions to the lower of $20,000 or 20 percent of income, the so-called "20/20 cap." IMPACT OF PERMANENTLY MODIFYING THE EXCLUSION OF EMPLOYEE CONTRIBUTIONS FOR RETIREMENT SAVINGS PLANS FROM TAXABLE INCOME: If the current exclusion of worker contributions for retirement savings plans were ended in 2012 and the total match remains constant, the average reductions in 401(k) accounts at Social Security normal retirement age would range from a low of 11.2 percent for workers currently ages 26-35 in the highest-income groups, to a high of 24.2 percent for workers in that age range in the lowest-income group. IMPACT OF "20/20 CAP": Earlier EBRI analysis of enacting the 20/20 cap starting in 2012 showed it would, as expected, most affect those with high income. However, EBRI also found the cap would cause a significant reduction in retirement savings by the lowest-income workers as well, and younger cohorts would experience larger reductions given their increased exposure to the proposal. IMPORTANCE OF EMPLOYER-SPONSORED RETIREMENT PLANS AND AUTO-ENROLLMENT: A key factor in future retirement income security is whether a worker has access to a retirement plan at work. EBRI has found that voluntary enrollment in 401(k) plans under the current set of tax incentives has the potential to generate a sum that, when combined with Social Security benefits, would replace a sizeable portion of a worker's preretirement income, and that auto-enrollment could produce even larger retirement accumulations. POTENTIAL INCREASE OF AMERICANS FACING INADEQUATE RETIREMENT INCOME: The potential increase of at-risk percentages resulting from (1) employer modifications to existing plans, and (2) a substantial portion of low-income households decreasing or eliminating future contributions to savings plans as a reaction to the proposed elimination of the exclusion of employee contributions for retirement savings plans from taxable income, needs to be analyzed carefully when considering the overall impact of proposals to change existing tax incentives for retirement savings.