IS THE CHILD-CARE CREDIT PROGRESSIVE

The child care credit has been widely perceived as regressive because critics claim that more credit is claimed by high-income taxpayers tha n low-income taypayers. The credit was changed in 1981 in an effort to make it more progressive. Nevertheless, the perception that the credi t is regressive persists. This paper applies three measures of tax pro gressivity to a sample of taxpayer data to determine whether the child care credit was regressive during 1979-1986, and whether changes made in 1981 made it more progressive. The conclusion is that the credit w as progressive over the entire period, becoming more progressive after 1981.