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Work and Poverty

State-Level Policies That "Make Work Pay"

By Iris J. Lav & Isaac Shapiro

Although federal tax changes have removed most poor families from the federal Income tax rolls, state and local governments have been increasing the tax burden imposed on the poor. As a result, a large number of the working poor cannot raise themselves out of poverty. This article examines some of the methods that states have taken to help the working poor, including higher minimum wages, more gradual welfare benefit reductions for working families, policies to exempt the working poor from state Income taxes, earned income credits, state sales tax offset credits, and state property tax circuit breakers.

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