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The New Earned Income Tax Credit: Too Complex For The Targeted Taxpayers?, Francine J. Lipman, James E. Williamson

Francine J. Lipman

In this article, the authors examine the present administrative system for the earned income tax credit (EITC) especially the refinements resulting from enactment of the Omnibus Budget Reconciliation Act of 1990 (OBRA). After describing the problems created by the complexities of the new EITC, the authors conclude that the present system is not working well. They propose that Congress reform the law so that the credit can be used to reduce an employee's liability for Social Security taxes, and refund any excess credit through an addition to take-home pay. The authors believe that the proposed EITC could be administered through …