When working harder does not pay: Low-income working families, tax liabilities, and benefit reductions

Jennifer L. Romich, Jennifer Simmelink, Stephen D. Holt

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

Under some circumstances, recent reforms to policies that affect the working poor create a barrier to workers who try to increase their families' financial well-being through greater earnings. As earnings rise, benefits are reduced and taxes increase. Together these two factors may mean that accepting a raise or working more hours may not make a worker's family better off financially. This article presents an analysis of the extent of implicit taxation and describes how low-wage workers experience this phenomenon. We address three areas: how benefit programs and the tax system together create high combined tax rates, the implications of this system for low-income families' well-being, and finally, suggestions for practice and reform.

Original languageEnglish (US)
Pages (from-to)418-426
Number of pages9
JournalFamilies in Society
Volume88
Issue number3
DOIs
StatePublished - Jul 1 2007

Fingerprint Dive into the research topics of 'When working harder does not pay: Low-income working families, tax liabilities, and benefit reductions'. Together they form a unique fingerprint.

Cite this