State earned income tax credit outreach: Capturing federal credits

Laurie B Gavilo-Lane, Tennessee State University


This dissertation will examine state outreach activities intended to increase participation in the federal Earned Income Tax Credit (EITC) from both a fiscal federalism and innovation diffusion perspectives. The federal EITC, which is one of the most significant redistributive tax expenditure programs in the United States, bypasses state governments in the administration of redistribution of wealth by directly channeling tax credits to working poor citizens. The impetus for this research is the premise that when the federal government created this direct tax expenditure program to mitigate poverty, states were incented to develop outreach programs in order to secure potential revenues that likely would have been funneled through states in the form of grants and aid via an expenditure-side mechanism as opposed to a revenue-side mechanism. The extant empirical literature on the Earned Income Tax Credit concentrates on characterizing individual winners and losers rather than the potential impact on state and local governments that receive or miss out on indirect financial benefits. The following dissertation addresses this issue from both qualitative and quantitative angles. The qualitative component, document and content analysis, will provide the foundation for a comparative case study design. First, I focus on state EITC legislation (n = 26 states, including the District of Columbia) and examine the diffusion of this policy innovation across the different planes of government. This approach exemplifies a novel means of examining the EITC from both a fiscal federalism and innovation diffusion theoretical frameworks. Next, in the quantitative chapter I conduct a time-series cross-section analysis on a panel dataset examining 50 states and the District of Columbia and spanning from the years from 1999 to 2010. This investigation examines the effect of outreach efforts at securing EITC credits for eligible working poor citizens and in particular determines the specific state-level EITC outreach efforts and strategic choices that are most closely linked with success or failure. KEYWORDS: earned income tax credit, institutional isomorphism, innovation diffusion, intergovernmental relations, fiscal federalism, organizational theory, public finance, social and distributive justice, social welfare policy, and tax policy.

Subject Area

Finance|Public administration

Recommended Citation

Laurie B Gavilo-Lane, "State earned income tax credit outreach: Capturing federal credits" (2013). ETD Collection for Tennessee State University. Paper AAI3612221.