Brief How Additional Cash Payments Would Reduce Poverty
Elaine Maag, Kevin Werner
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Four major policies in the American Rescue Plan (ARP) will reduce the number of people in poverty in 2021 from 44 million to 28 million – shrinking the overall poverty rate from 13.7 percent to 8.7 percent. Additional $1,400 payments could further reduce poverty to between 6.4 and 6.6 percent, depending on whether all people in the US are included or whether payments are limited to citizens. Two additional $1,400 payments could reduce poverty between 4.9 and 5.2 percent. Drops in poverty would be greatest for Black and Hispanic households.

Research Areas Social safety net Taxes and budgets
Tags Poverty Refundable tax credits Taxes and social policy
Policy Centers Income and Benefits Policy Center
Research Methods ATTIS Microsimulation Model