Several recent studies have documented a “race to the bottom” in welfare benefit levels, whereby states respond to their neighbors’ benefit reductions with reductions in their own welfare generosity. Why might a state respond to its neighbors’ change in generosity?
Answer to relevant QuestionsThe Earned Income Tax Credit (EITC) provides a cash subsidy for every $1 earned by those with incomes below $33,700 per year. How might the EITC raise an individual’s overall work effort? How might the EITC lower an ...The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 imposed limits on the amount of time that a family could receive cash welfare payments during its members’ childhoods. Groggier and Michalopoulos ...Why should casualty losses or large medical expenditures be fully tax-deductible only under certain circumstances? Your employer allows you to purchase a parking permit with “pretax dollars”—that is, you don’t have to pay taxes on the money that you used to purchase this permit. Does allowing some people to purchase certain goods ...The government is considering imposing taxes on the sellers of certain classes of products. The first tax they are considering is a tax on 2% milk. The second is a tax on all dairy products. The third is a tax on all food ...
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