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Asset-Building, Tax Policies, and Subsidies

Asset-building, tax credits and subsidies are all strategies designed to improve the financial well-being of families. Asset-building programs typically aim to improve the net worth and financial security of families, while tax credits and subsidies increase the refund received.

Generally, asset-building includes initiatives designed to help low-income families connect to mainstream financial markets, improve money management skills, save and plan for the future, build or repair their credit, and build their net worth. Federal tax credits are available to qualifying families, and programs surrounding these credits typically include marketing and outreach, counter predatory lending practices, and promote affordable tax preparation services. Certain States and municipalities also operate State tax credit and subsidy programs. The importance and effectiveness of these tax policies, subsidies and programs to self-sufficiency pathways is often a topic of research.

View recommendations from the SSRC Librarian on Asset-Building, Tax Policies, and Subsidies and relevant federal laws and regulations below. 

hands holding a paper cutout of a house and car

 

Strategies and tools designed to assist low-income individuals and families in developing assets include financial education, savings accounts, getting banked, managing credit and debt, tax credits and filing assistance, and accessing federal and state benefits. Research on asset-building and development frequently discusses bank accounts, individual development accounts (IDAs), and/or financial management. Research on tax credits and subsidies frequently explores the Earned Income Tax Credit and its impact on low-income individuals and families. 

Behavioral economics at tax time

This Webinar shared findings from two current projects that aim to help us understand what works to encourage low-income tax filers to save and invest part of their tax refund.

 

The Great Recession hits home: Asset depletion and foreclosure in Boston

Dr. Hannah Thomas was featured in a Webinar with Dr. Curtis Skinner as a discussant. During the Webinar, Dr. Thomas explored the ways that foreclosure affects households, including finances, health, trust in lending institutions, and stability. Based on interviews with families in Boston, MA, the Scholar relayed her findings as to why households in foreclosure often end up spending their hard-earned savings and wealth in a process of asset depletion.

 

Pathways to accumulating assets among low- and moderate-income families

Dr. Ruby Mendenhall discussed whether low- and moderate-income families can, in the face of challenges including limited resources and financial shocks, accumulate assets, such as savings and homes. She also identified pathways these families can use to accumulate assets, as well as the precursors to asset accumulation and social mobility.

 

Legislative and regulatory requirements frame allowable programs and initiatives designed to assist low-income individuals in accumulating assets such as savings accounts, houses, and degrees/certifications. Click the first link below to view legislative resources specific to asset-building and subsidy programs for low-income individuals. Click the second link to browse additional self-sufficiency legislation and policy in the SSRC library.

Legislative resources on Asset-Building, Tax Policies, and Subsidies

  • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
  • American Recovery and Reinvestment Act of 2009
  • Community Opportunities, Accountability, and Training and Educational Services Act of 1998

Search the SSRC library for additional self-sufficiency legislation and policy:

  • Search Statutes
  • Search Regulations