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Research report

Federal and State Income Taxes and Their Role in the Social Safety Net

Elaine Maag
July 23, 2015
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Abstract

Federal and state income taxes play an important role in providing income support for low-income households by administering refundable tax credits, such as the earned income tax credit (EITC). Using the Urban Institute’s Net Income Change Calculator (NICC), which provides state- and federal-level information on tax and transfer programs in 2008, I calculate the value of TANF and SNAP as well as state and federal income taxes for a single parent working full-time at the minimum wage with two children. In many cases, state and federal tax credits exceed the value of the more traditional safety net programs.

Research Area

Individual Taxes Earned income tax credit (EITC) State and Local Issues State and local taxes
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Meet the Experts

  • Elaine Maag
    Senior Fellow, Research
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