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Don Moynihan
@donmoyn.bsky.social
Policy Professor, Ford School, University of Michigan. Irish immigrant. Administrative burdens guy. Free newsletter, Can We Still Govern?: donmoynihan.substack.com
27.5k followers990 following5.3k posts
DMdonmoyn.bsky.social

New from me & @pamherd.bsky.social: how the US welfare state has evolved Good news: programs that have grown have become less burdensome. Bad news: there is greater inequality in the experience of burden. (Please support the non-Taylor Swift take industry) donmoynihan.substack.com/p/fewer-burd...

Fewer burdens but greater inequality?
Fewer burdens but greater inequality?

The implications of moving more of the safety net through the tax system

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SFshawnfremstad.bsky.social

I was going to comment on this post, but I ran into an administrative burden. 😜

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DBdbonowitz.bsky.social

Prof Moynihan, I'm curious if you have any thoughts on Suzanne Mettler's "The Submerged State." (I have not read it, but I watched her talks and interviews about it when it came out, while trying to gauge the meaning of tax credits for seismic retrofit.)

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Why don't we means test corporate tax breaks? They claim tax breaks help their employees. Make them prove it.

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DMdonmoyn.bsky.social

Moving more of the welfare state through the tax system (chiefly through the EITC or Child Tax Credit) has meant lower burdens, who do not have to encounter a separate bureaucracy. But safety net clients face high burdens in the audit process.

One reason for this progress is that delivering benefits through the tax system has decreased burdens on average. The EITC, which subsidizes wages for low income workers via the tax system, has grown by over 30 percent since the mid 1990s and by some estimates substantially decreases poverty impacts for over 28 million Americans. One only needs to fill out the relevant part of their annual tax form. There is no extra bureaucracy, welfare office, or administrative process to deal with. De facto work requirements can be satisfied with tax documents collected directly by the IRS. People can complete the process with free tax preparation software or benefit from either free or paid tax assistance. Given this professional tax help, individuals eligible for the EITC and CTC generally access their supports via the tax system.
Even those claiming tax credits, however, have uneven experiences. The highest burdens for EITC recipients is not in claiming the benefit, but the potential to be audited. In 2019, 53% of IRS audits were conducted on those with incomes below $50,000, and 82% of those individuals had claimed the EITC. This audit pattern also disproportionately targets Black EITC recipients, a form of radicalized burdens. The current IRS leadership is promising to do better, and new resources allows it to better target higher income earners rather than EITC recipients.
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Don Moynihan
@donmoyn.bsky.social
Policy Professor, Ford School, University of Michigan. Irish immigrant. Administrative burdens guy. Free newsletter, Can We Still Govern?: donmoynihan.substack.com
27.5k followers990 following5.3k posts