To amend the Internal Revenue Code of 1986 to increase the amount of the earned income tax credit, to make the credit for dependent care expenses refundable, and for other purposes.

Amends Internal Revenue Code provisions governing the earned income tax credit to: (1) increase from $5,714 to $6,810 the amount of earned income subject to the credit; and (2) increase the credit percentage from 14 percent to 21 percent (30 percent for taxpayers with two or more dependent children in the household). Decreases the amount of the credit for taxpayers whose adjusted gross income exceeds $10,740. Indexes all relevant dollar amounts beginning in 1991. Allows advance tax credit payments by employers to employees who provide certification of eligibility.

Amends provisions governing the dependent care credit to: (1) make it refundable; (2) increase from $10,000 to $20,000 the threshold adjusted gross income triggering a reduction of the credit amount and decrease from $2,000 to $1,000 the increment applied in such reductions; and (3) disallow the credit with respect to federally-funded employment-related expenses.

Disregards certain governmental assistance payments in determinations of: (1) dependency for personal exemption purposes; and (2) eligibility for the earned income credit.

Revises the income tax rate schedule to add an explicit 33 percent bracket applicable to taxpayers with high income ($78,350 or more for joint filers). Retains a 28 percent rate with respect to capital gains.

Amends title XX (Grants to States for Services) of the Social Security Act to allot to States funds, in increasing amounts, for social services for FY 1991 through 1993 and thereafter.

Directs the Secretary of the Treasury to study and report to specified congressional committees on the feasibility of an advance payment system with respect to the dependent care tax credit.