Tax Credit Research Articles (Page 1)

Abstract In 2022, the U.S. government passed unprecedented climate and social equity legislationthe Inflation Reduction Act (IRA) -designed to incentivize renewable and low-carbon energy deployment, promote domestic supply chains, and address labor and environmental justice concerns. In this study, we model the effects of the IRA on renewable energy manufacturing and development costs and deployment. We find that tax credits to encourage expansion of U.S. manufacturing are likely to generate comparative cost advantages for domesticallyproduced components across the utility-scale solar and wind supply chain relative to imported components. We also show that the bonus rate tax credits for renewable developers will decrease the U.S. average levelized cost of utility-scale solar (26-65%), land-based wind (43-61%), and offshore wind (16-19%) projects, even when accounting for uncertainty in inflation, domestic content of renewable components, and pass-through of component cost savings associated with the manufacturing tax credit to developers. Additional tax credits available to developers meeting energy community and domestic content share requirements further reduce costs for qualifying projects. We find that tax credits for renewable developers collectively have the potential to substantially increase the deployment of renewable infrastructure, drive demand for domestically-produced components, and foster workforce access, higher wages, and the retention of workers. A large share of renewable investments and capacity may flow to disadvantaged communities (27 and 46% for utility-scale solar and land-based wind projects, respectively), although inframarginal changes in development costs associated with place-based incentives, such as the energy community tax credit, may be insufficient to influence project siting decisions, given transmission constraints, spatial proximity to electricity demand, and renewable resource potential.

This conceptual paper examines into the intricate budgeting and forecasting challenges confronting Electric Vehicle (EV) startups as they navigate a capital-intensive market characterized by rapid innovation and systemic uncertainty. The path to commercialization is filled with financial perils, includes high upfront costs associated with EV manufacturing, the expense of battery components, which constitutes a significant portion of the bill of materials and directly impacts pricing strategies and margin projections. Adding to this issue are demand uncertainty and market volatility; startups must forecast sales in a nascent market where consumer adoption depends on number of factors, which are largely beyond their control. Simultaneously, their financial models must account for severe supply-side constraints, including critical mineral scarcity for batteries and recurring semiconductor shortages, which create unpredictable production bottlenecks and volatile input costs that can devastate a carefully planned budget. The external ecosystem presents another layer of complexity, as massive infrastructure gaps in public charging networks necessitate co-investment and strategic partnerships, demanding innovative business model innovation to share risks and costs. Perhaps the most formidable forecasting variable is the pervasive influence of government. Startups must build flexible financial scenarios that can adapt to the sudden introduction, alteration, or expiration of purchase incentives, tax credits, and emissions regulations, which can instantly alter the competitive landscape and value proposition. Consequently, this paper contends that traditional financial planning is insufficient. Achieving viability requires EV startups to develop dynamic, multi-faceted forecasting models that integrate real-time risk assessments from the supply chain, policy arena, and consumer markets.

Taking China’s 2018 value-added tax (VAT) credit refund reform as an exogenous shock to improve VAT neutrality, we use a difference-in-differences approach to explore how the reform affected corporate social responsibility (CSR). We find that the reform motivated firms to improve CSR performance. The reform has a “resource” effect, increasing internal funds and reducing financing costs, thereby enhancing firms’ ability to undertake CSR. The reform also has a “reputation” effect, stimulating firms’ willingness to engage in CSR to improve their reputations. CSR following the reform increases firm values and reduces bankruptcy risk. Our study provides fresh insights into VAT neutrality theory and is a reference for tax reform in emerging economies.

This paper examines the economic implications of demographic transitions in China and the United States, focusing on three key dimensions: declining birth rates, population aging, and immigration. Drawing on secondary statistical data, international reports, and existing scholarly research, the study employs a comparative analytical framework to highlight both shared challenges and divergent policy responses. The findings indicate that Chinas sharp fertility decline, partly shaped by past birth control policies, has accelerated its aging process, leading to labor shortages and rising fiscal burdens. The United States, while also facing lower fertility, benefits from immigration flows that help mitigate demographic imbalances and sustain innovation. In both countries, aging populations exert mounting pressure on pension systems, healthcare, and labor markets, though the pace and severity differ significantly. The analysis further shows that policy interventions such as tax credits, family support measures, delayed retirement, and talent-oriented immigration reform may provide partial relief but cannot fully offset structural demographic trends. The paper concludes that demographic change will remain a critical determinant of long-term economic resilience in both nations.

Effects of Local Labor Market Conditions at Birth on Later Life Health and Health Behaviors.

Welfare policies, joint pain prevalence and educational gaps in 50 U.S. states from 2011 to 2021: A fixed effects analysis.

Objectives. To understand the experiences of families with low income in California with pandemic safety net support expansions and retractions, including barriers to program access. Methods. Using open-ended questions, we explored the self-reported experiences of pandemic-era safety net expansions and expirations between January and June 2023 among a group of caregivers of young children (n = 44). We used the Immersion-Crystallization technique to analyze the data, creating a codebook and identifying themes as they emerged. Results. We identified 4 main themes, including appreciation for safety net expansions, varied experiences because of the timing of supports, challenges meeting basic needs after expirations, and administrative burdens significantly impairing program access. Conclusions. The study themes highlighted how expansions to policies like the Child Tax Credit and Supplemental Nutrition Assistance Program improved food and housing security, and that unpredictable benefits, although appreciated, also added stress. Public Health Implications. State and federal policymakers should consider the poverty reduction and food and housing security benefits of expansions to pandemic-era supports that have expired when crafting future policy. They should pay special attention to addressing administrative barriers to reduce poverty-related health inequities. (Am J Public Health. 2025;115(11):1836-1847. https://doi.org/10.2105/AJPH.2025.308201).

Intimate Partner Violence and Income: Quasi-Experimental Evidence from the Earned Income Tax Credit

Objectives. To evaluate the impact of the temporary expansion of the Earned Income Tax Credit (EITC) for childless adults in 2021 on the mental health of home renters and homeowners. Methods. We used US Behavioral Risk Factor Surveillance System data from 2021 through 2023. Mental health outcomes included the number of mentally unhealthy days in the past 30 days and an indicator for frequent mental distress (14 or more unhealthy days). We used a difference-in-differences design comparing outcome changes before and after the EITC expansion between young adults 18 to 24 years of age (treatment group) and adults 25 to 29 years of age (control group), separately for renters and homeowners. Results. The EITC expansion was associated with statistically significant improvements in mental health among young renters but not homeowners. Specifically, after the expansion in 2022, renters 18 to 24 years of age experienced a mean of 2.21 fewer mentally unhealthy days and exhibited a 9.8 percentage point decrease in the probability of frequent mental distress relative to older renters. Conclusions. Our findings suggest that antipoverty programs such as the EITC are associated with improvements in mental health among young adults who rent. (Am J Public Health. 2025;115(11):1858-1867. https://doi.org/10.2105/AJPH.2025.308219).

Tax credit promote cooperation in a punishment-based spatial public goods game

Summary In this paper, we present a method for incorporating existing pipelines into the design of optimal carbon dioxide (CO2) transportation networks for carbon sequestration projects. The selection of the optimal pipeline transportation network is a crucial aspect of large-scale carbon sequestration projects as it greatly affects the project’s economics. The method proposed in this paper aims to address the limitation of existing open-source tools, such as SimCCS2.0, which are unable to accommodate existing pipelines in techno-economic optimization. With the recent amendment to the 45Q laws, which now offers 70% more tax credits for carbon sequestration than in 2018, energy companies are exploring the possibility of repurposing gas and liquid transportation lines for CO2 transportation to abandoned oil and gas wells for carbon sequestration. This has further reinforced the need for a method that accounts for existing pipelines in sequestration economics. The proposed method achieves this by representing the pipeline paths on the construction cost graph as zero-cost paths. Additionally, pipeline tie-in locations are fixed by creating exclusion zones that limit inflow edges around the pipeline path. The solution is then obtained by solving for candidate transportation network routes using graph shortest path algorithms. This reformulation of the CO2 source-sink connection flow problem with limiting constraints on existing pipeline flow direction and capacity makes it possible to assess cost reduction associated with different CO2 sources tie-in locations along existing transport pipelines. The solution was developed using the Python programming language, and small-scale demo test cases have been used to illustrate its effectiveness in four tie-in cases with single pipeline and multiple pipelines that cut across several CO2 source and sink locations. The method has also been applied to the evaluation of a proposed Carbon Storage Assurance Facility Enterprise (CarbonSAFE) II project and the results used to assess optimal pipeline tie-in points for expanded sequestration capacity. The developed Python package is publicly available on GitHub for researchers and economic analysts to use for evaluating large-scale carbon capture, utilization, and storage projects, with the aim of encouraging further development and collaboration.

This study assesses the risks, opportunities, and economic implications of dual-purpose carbon dioxide (CO₂) injection for Enhanced Oil Recovery (EOR) and long-term carbon storage in the U.S. energy sector. Through a comprehensive review of Carbon Capture Utilization and Sequestration (CCUS) technologies, policy frameworks, and case studies such as the Petra Nova and Illinois Industrial Carbon Capture projects, the analysis evaluates how this approach can enhance energy security, stimulate economic growth, and support climate goals. Key findings reveal that dual-purpose CO₂ injection extends the lifespan of oil fields, reduces net carbon emissions through permanent sequestration, and generates economic benefits via job creation and revenue generation. However, its success depends on overcoming technical challenges (e.g., leakage risks), financial barriers (e.g., high capital costs), and regulatory uncertainties. Policy incentives like the 45Q tax credit and advancements in monitoring technologies are critical for scaling deployment. The study concludes that dual-purpose CO₂ injection offers a transitional pathway to balance fossil fuel dependency with decarbonization, contingent on robust policy support, stakeholder engagement, and technological innovation.

ABSTRACT Policy feedback theories suggest that experiencing government benefits can reshape political attitudes, but evidence of how quickly these effects develop and whether they persist after benefits are withdrawn remains limited. This paper examines the 2021 Advanced Child Tax Credit (ACTC), tracking public support through six surveys spanning the policy's complete lifecycle—from pre‐implementation through two years post‐expiration. Using a quasi‐experimental design comparing parents eligible for benefits to pre‐benefit baselines and non‐parents, we find that experiencing the ACTC generated substantial and lasting increases in support among Republican parents (28 percentage points), while non‐parent views remained mostly unchanged. While partisan differences persisted overall, the results nonetheless suggest that partisanship does not necessarily dominate self‐interest. By examining attitudes well after policy repeal, this study provides unique insights into how brief exposure to universal benefits can create durable constituency support, even in highly polarized environments where policy feedback fails to prevent policy retrenchment.

Accelerating U.S. renewable energy deployment at multi-gigawatt scale requires financial structures that mobilize institutional capital efficiently while aligning risk, tenor, and yield with asset characteristics. This review examines how multi-billion-dollar capital market instruments—green and climate bonds, project bonds, asset-backed and covered bond securitizations of distributed energy assets, YieldCos and listed infrastructure vehicles, private credit funds, and tax-credit monetization structures—can compress the cost of capital and expand balance-sheet capacity. We synthesize structuring choices across tranching, covenants, and cash-flow waterfalls; map risk transfer for construction, merchant price exposure, curtailment, congestion, and counterparty default; and evaluate credit enhancement via loan guarantees, first-loss capital, insurance wraps, and reserve accounts. The paper analyzes interfaces with federal and state incentives (e.g., investment and production tax credits, transferability and direct pay), grid interconnection timelines, and long-dated offtake contracts (PPAs, VPPAs, hedges). We assess transparency standards (use-of-proceeds and sustainability-linked KPIs), data and verification requirements for performance analytics, and implications for secondary-market liquidity. Finally, we propose scalable program designs for utility-scale solar, onshore/offshore wind, storage hybrids, and community energy portfolios, outlining standardized documentation, aggregation pipelines, and warehousing strategies that can unlock deep pools of pension, insurance, and sovereign capital while safeguarding system reliability and just-transition objectives. Keywords: Renewable Energy Finance, Green Bonds, Securitization, YieldCos, Credit Enhancement.

Tax incentives are widely used globally to encourage investment, but their effectiveness in attracting incremental investments is often questionable; tax incentives can present challenges. The general objective of this study was to investigate the effect of tax incentives on economic growth in Rwanda. Specifically, to determine the effect of tax credit incentives on economic growth of Nyarugenge district, to examine the effect of tax deduction incentives on economic growth of Nyarugenge district, and to analyze the effect of tax exemption incentives on economic growth of Nyarugenge district. This study was guided by the agency theory of tax incentives, deduction theory, and tax competition theory. The study used descriptive and correlational research designs. A sample size of 396 respondents was drawn from 38,647 individuals involved in tax incentives and economic growth in the Nyarugenge district. The study utilized the simple random sampling. This study employed the questionnaire and interview guide for data collection. The study used descriptive and inferential statistics for data analysis. The results show that the overall high mean of 3.99 (SD=1.129) for the combined statements reflects a very strong positive perception that there is an effect of tax credit incentives on the economic growth of the Nyarugenge district, the overall high mean score of 3.93 (SD=1.302) for the combined statements reflects an overall strong positive perception that there is an effect of tax deduction incentives on the economic growth of the Nyarugenge district, and the overall very high mean score of 4.04 (SD=1.082) for the combined statements reflects a strong positive perception that there is an effect of tax exemption incentives on the economic growth of the Nyarugenge district. Additionally, the findings reveal that tax credit incentives have a positive coefficient of the estimate, which was significant (β=0.152, p=0.000˂0.05). Findings reveal that tax deduction incentives have a positive coefficient of the estimate, which was significant (β=0.109, p=0.000˂0.05), and the findings reveal that tax exemption incentives have a positive coefficient of the estimate, which was significant (β=0.657, p=0.000˂0.05). The study concludes that tax credits, tax deductions, and tax exemptions contribute to economic growth in Rwanda, focusing specifically on the Nyarugenge district. The study recommends that tax incentive managers should understand the local economic landscape and identify sectors that would benefit most from tax credit incentives; they should create awareness for encouraging investment and entrepreneurship, and the study suggests that tax exemption incentives should be strategically designed to benefit sectors with high growth potential, such as technology, tourism, and agriculture.

This study provides an in-depth analysis of profit distribution within Apple's iPhone global value chain (GVC), integrating data from Apple's Form 10-K filings, teardown cost studies by TechInsights and Counterpoint, UN Comtrade HS 8517 trade statistics, regional statistical yearbooks (Shenzhen and Zhengzhou), Indian PLFS wage data, and the Santa Clara County Economic Outlook. This study develops a sophisticated value-added model: =RMWO, to allocate unit profits among component suppliers in Shenzhen, assembly centres in Zhengzhou and Chennai, and the Cupertino headquarters. Results show that component manufacturers retain approximately 5% of the unit profit, assemblers retain approximately 15%, and Cupertino maintains over 60%. GIS heat maps and Sankey diagrams vividly illustrate the dramatic surge in earnings at the headquarters node. This study traces this gradient to Silicon Valley's agglomeration economies, intellectual property rent extraction, and strategic transfer pricing. Finally, this study simulated three policy interventions a regional R&D tax credit, a workforce skill upgrading program, and an OECD Pillar 2 minimum tax rateto examine how up to $3.4 billion could be reallocated without undermining Apples incentives to innovate. These findings contribute to the debate on equitable upgrading of digital global value chains.

ABSTRACTThe climate crisis poses an acute threat to humanity. Eco‐social policy can help mitigate this threat, but eco‐social policy and the green transition are expensive. Our paper contributes to a better understanding of the role that green subsidies play in advancing eco‐social politics and policies. We assert that green subsidies increase the political viability of eco‐social policies. Green subsidies lead trade unions and business organizations to support eco‐social policies, regardless of institutional differences. We illustrate these positive‐sum effect dynamics with a most different systems design that compares green subsidies and eco‐social policies in Germany (subsidies, qualification and training measures, coal phase‐out strategy, green housing) with the United States (climate‐related tax credits, Inflation Reduction Act, and green housing). Based on a content analysis of documents and interviews, our comparison of business organizations and unions in both countries reveals strong and broad support for green subsidies in combination with eco‐social policies. We also discuss the second Trump administration and suggest that green subsidies help advance the green transformation in the face of significant political adversity.

This study presents a sustainable inventory model tailored for a retailer managing deteriorating green products, where demand evolves and is influenced by environmental factors. The model incorporates a linearly increasing advertising schedule to reflect the impact of dynamic promotional efforts on eco-conscious consumer behavior. To curb product deterioration, the retailer can invest in preservation technologies that effectively slow the deterioration rate through a factorial reduction mechanism. The cost framework accounts for both time-sensitive reordering efforts and the diminishing returns of financial investment. Additionally, the model factors in carbon emissions from advertising activities, along with penalties for excess emissions and tax credits for adopting green technologies. The retailer aims to maximize overall profit by jointly optimizing selling price, replenishment timing, advertising intensity, and green investments. Analytical insights demonstrate that coordinated decision-making enhances profitability and reduces product obsolescence and environmental impact. The findings highlight the critical role of integrating marketing strategies with sustainability initiatives, offering a practical guide for retailers aiming to achieve economic efficiency and environmental stewardship.

It is essential to incorporate a racial perspective into the study of public finance and tax policy. This research, using data from the U.S. Census Bureau, shows that minority taxpayers face a disproportionately higher income tax burden. Nonwhite families pay an average of $3,304 more in federal taxes and $1,465 more in state taxes compared to white families. Specifically, African American families pay $3,536 more in federal taxes and $1,288 more in state taxes. This disproportionate tax burden can be attributed to the higher proportion of income minority taxpayers derive from salaries and wages. Although federal programs like the Earned Income Tax Credit and Child Tax Credit have reduced these disparities, there is still a pressing need for more targeted policies to eliminate and potentially reverse the longstanding racial disparities in the U.S. tax system.

Tax expenditures in sub-Saharan Africa (SSA) are less well understood than in other regions and in some cases represent a significant element of fiscal policy. Tax expenditures involve provisions within tax systems that reduce tax liability relative to a benchmark and can include tax exemptions, deductions, credits, or preferential rates, and can impact revenue collection, equity, and governance. This paper seeks to shed light on tax expenditures in sub-Saharan Africa (SSA), draw attention to the presence of significant data gaps, transparency, and governance issues in the region, and build on studies by other institutions and agencies. It reviews how the IMF has engaged on this issue in recent years and highlights the importance of tax expenditures to macro-fiscal stability in the current liquidity-constrained environment. It also offers some practical recommendations to policymakers and external stakeholders for advancing work in this area.