How Tax Credits Can Support Formerly Incarcerated Individuals and Their Families

AuthorNatalie Smith
Published date01 May 2022
Date01 May 2022
Subject MatterImproving Human Capital and Labor Market Opportunities
134 ANNALS, AAPSS, 701, May 2022
DOI: 10.1177/00027162221114232
How Tax
Credits Can
Individuals and
Their Families
Tax credits like the Earned Income Tax Credit (EITC)
can provide vital income support to people returning to
their communities following incarceration. But the cur-
rent design of the EITC prevents many from accessing
the income support that it provides. In this article, I
propose expanding the EITC so that it better serves
communities that have been harmed by punitive crimi-
nal legal policy. An expanded EITC could raise the
incomes of community members returning from incar-
ceration by 8 to 40 percent and raise the incomes of
some caregiving families by 20 to 35 percent. I also
consider the potential of the Work Opportunity Tax
Credit (WOTC) to encourage employers to hire justice-
involved workers. Finally, I argue that policy-makers
should develop a bolder, refundable tax credit targeted
at individuals who return to their communities from a
variety of institutions, including carceral facilities. With
more inclusive tax credits, social policy can begin to
redress the harms of mass incarceration and support a
vision of public safety that is centered on flourishing
Keywords: tax credits; EITC; WOTC; incarceration;
reentry family; community
Mass imprisonment has taken a tremendous
social and financial toll on the low-income,
Black, and Latinx communities in which car-
ceral enforcement is concentrated (Garland
2001; Western 2006; Clear 2007). Poverty
presents perhaps the greatest threat to eco-
nomic well-being and mobility for people
returning from incarceration, including those
under community-based correctional supervi-
sion. As such, supporting the economic well-
being of people returning from incarceration,
Natalie Smith is a JD candidate at Yale Law School.
Her research focuses on the effects of incarceration on
families, with publications in Demography and PNAS.
Her primary interest is in how the legal system can shift
power to marginalized communities.
many of whom face significant obstacles to steady employment (Western 2002;
Pager 2003), is an opportunity for policymaking that can promote both indi-
vidual and family wellbeing and social justice. As such, supporting the eco-
nomic well-being of people returning from incarceration, many of whom face
significant obstacles to steady employment (Western 2002; Pager 2003), is an
opportunity for policymaking to promote individual and family well-being, and
social justice.
Punitive criminal legal policy heavily burdens the families of incarcerated
people and, in particular, their female relatives and their children (Western
2018). One in four women in the United States has a family member who has
been incarcerated, and nearly half of all Black women have a currently or for-
merly incarcerated family member (Lee etal. 2015). Due to the stark material
hardships faced by returning community members following prison release,
family members play a key role in supporting reentry (Fontaine et al. 2012;
deVuono-powell etal. 2015). Older female kin—grandmothers, mothers, and
sisters—play an especially crucial role in providing housing and financial
resources (Western et al. 2015; Western 2018). In a longitudinal interview
study of individuals reentering neighborhoods in Boston, Western etal. (2015,
1524) find that “about 80 [percent] of respondents who reported staying with
family were staying with female relatives, and around half of these were moth-
ers.” While families provide significant resources to their returning family
members (Harding, Morenoff, and Wyse 2019), the reentering family member
may not be able to reciprocate financially, as the earnings loss associated with
imprisonment ranges between 10 and 30 percent (Western 2002). In this con-
text, the family members of reentering people often operate as de facto front-
line service workers. Few families, however, receive the resources available to
formal support programs, and many must shoulder the costs of caregiving
alone. The chronic stress, instability, and familial disruptions related to caregiv-
ing work indicate a need for “family support interventions” in reentry policy
(Pettus-Davis 2021, 12).
Further, an estimated 2.5 million children under the age of 18 years have a
parent incarcerated in prison or jail (Wakefield and Wildeman 2014). Parental
incarceration is associated with multiple negative outcomes, including reduced
family income, increased risk of homelessness, and diminished school achieve-
ment (Western and Smith 2018). Formerly incarcerated fathers, on average,
make lower contributions to family finances when compared to similarly situated
fathers who have never been incarcerated, due to incarceration’s corrosive effects
on labor market prospects and relationship stability (Western and Smith 2018;
Geller et al. 2011). Economically, incarceration acts “like a hidden tax” that can
significantly lower household income (Braman 2004, 156).
NOTE: An earlier draft of this article was prepared in David Super’s course on Public Welfare
Law at Yale Law School. I am grateful to David Super, Bruce Western, David Harding, Jasmin
Sandelson, Anne Alstott, and Mark Firmani for their helpful comments on prior versions of
this article.

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