Research Report Federal and State Income Taxes and Their Role in the Social Safety Net
Elaine Maag
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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 Areas Social safety net Taxes and budgets State and local finance
Tags State programs, budgets State and local tax issues Individual taxes Earned income tax credit
Policy Centers Urban-Brookings Tax Policy Center