One thing that gets lost in the rhetoric is that many of the solutions we have are already effective — they just need to be improved. And we have plenty of ideas that already help lift families out of poverty while encouraging them to work. Sounds perfect, right?
The Earned Income Tax Credit (EITC) is one such program. It provides a tax credit based on how much income a worker takes in — the more income they take in, the more benefit they get, up to a maximum point when it starts to phase out. This gives working people incentive to keep working rather than rely on assistance alone.
Through the removal of financial restrictions tacked onto certain marriage policies, President Barack Obama brings hope to low-income couples by acknowledging the financial and moral benefits marriage can have on America's society. Politico reports:
Most benefits for low-income families phase out as income rises. Taken separately, these reductions are understandable and reasonable. But combined, they effectively act as high tax rates — reducing take-home pay for low-income workers — and create a disincentive to work harder. Low-income families can thus find themselves in a situation where receiving a raise or promotion results in losing more in benefits than they receive in additional earnings.
Read more here.
Low-income people are likely to spend additional income on food and basic consumer products. This is good for sales. When sales go up, so does hiring.
We don’t have to make a choice between helping low income people and helping small businesses. We can do both.
We all benefit when parents are able to feed and clothe their children.