Taxing the Poor: Income Averaging Reconsidered

58 Pages Posted: 14 Jun 2010

Date Written: 2003


This Article presents an original empirical analysis demonstrating that low-income families experience far greater income fluctuations than higher-income families and, as a result, taxation of annual income disproportionately burdens low-income families. The author proposes two simple income averaging devices to redress this effect: averaging the Earned Income Tax Credit over a two-year period and carrying back the standard deduction and personal and dependent exemptions.

Keywords: income volatility, income fluctuations, income averaging, tax policy, income taxation, economic security, Earned Income Tax Credit, standard deduction, personal exemptions

JEL Classification: D10, D30, D31, D63, H22, H24, H30, H31, H53, I32, I38, J18, J20, J31, J38, J63, J65, J68, K34

Suggested Citation

Batchelder, Lily L., Taxing the Poor: Income Averaging Reconsidered (2003). Harvard Journal on Legislation, Vol. 40, 2003, Available at SSRN:

Lily L. Batchelder (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-992-8156 (Phone)

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