Advanced Search
MyIDEAS: Login to save this article or follow this journal

How Marginal Tax Rates Affect Families At Various Levels Of Poverty

Contents:

Author Info

  • Maag, Elaine
  • Steuerle, C. Eugene
  • Chakravarti, Ritadhi
  • Quakenbush, Caleb
Registered author(s):

    Abstract

    High marginal tax rates can make moving above poverty very difficult for low-income families. These high tax rates result from increasing direct taxes (both state and federal) as well as decreasing transfer payments (including both Supplemental Nutrition Assistance Program benefits and Temporary Assistance for Needy Families). Depending on which state a person lives, a single parent with two children can face an average marginal tax rate of over 100 percent or as low as 26.6 percent as they move from the poverty level of income to 150 percent of the poverty level. If her earnings are limited to only six months of the year, she may retain transfer benefits for the remaining six months, lowering her marginal rate over the same income range to between 66.0 percent and –17.7 percent for those additional earnings. Our analysis shows how sensitive marginal tax rates are to assumptions about earnings patterns and program participation.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.ntanet.org/NTJ/65/4/ntj-v65n04p759-82-how-marginal-tax-rates.pdf
    Download Restriction: no

    File URL: http://www.ntanet.org/NTJ/65/4/ntj-v65n04p759-82-how-marginal-tax-rates.html
    Download Restriction: no

    Bibliographic Info

    Article provided by National Tax Association in its journal National Tax Journal.

    Volume (Year): 65 (2012)
    Issue (Month): 4 (December)
    Pages: 759-82

    as in new window
    Handle: RePEc:ntj:journl:v:65:y:2012:i:4:p:759-82

    Contact details of provider:
    Postal: 725 15th St. NW #600. Washington, D.C. 20005-2109
    Phone: (202)737-3325
    Fax: (202) 737-7308
    Email:
    Web page: http://www.ntanet.org/
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
    2. Eissa, Nada & Liebman, Jeffrey B, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 605-37, May.
    3. Holt, Stephen D. & Romich, Jennifer L., 2007. "Marginal Tax Rates Facing Low– and Moderate–Income Workers Who Participate in Means–Tested Transfer Programs," National Tax Journal, National Tax Association, vol. 60(2), pages 253-76, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Casey B. Mulligan, 2012. "The ARRA: Some Unpleasant Welfare Arithmetic," NBER Working Papers 18591, National Bureau of Economic Research, Inc.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:65:y:2012:i:4:p:759-82. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charmaine Wright).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.