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More Evidence on the Wrong-headedness of the ‘War on the Poor’

Jon Stewart recently skewered the “War on the Poor” crowd for the mean-spiritedness of their push to raise taxes on families in or near poverty (all while blithely ignoring the fact that low- and moderate income families pay a substantial share of their income in federal, state, and local taxes).

A group of Canadian researchers have recently added to the growing pile of evidence showing that the War on the Poor is not just mean-spirited but also wrong-headed.

In a paper in the August 2011 issue of the American Economic Journal: Economic Policy (earlier, free working paper available here), the two researchers used provincial differences in the implementation of Canada’s version of the Earned Income Tax Credit to measure the impacts of income assistance on children in low-income families.

While other studies in the US have shown that an increase in income for low-income families with young children is associated with higher earnings for those children when they reach adulthood, the research design of this Canadian study was better able to attribute a causal relationship between the change in benefit-related income and later childhood outcomes.

The results?  More generous income supports led to:

  • Major improvements in test scores, especially among boys,
  • Improved health outcomes, especially among boys, and
  • Major improvements in emotional and mental health outcomes, especially among girls.

The findings of this study and others should take the wind out of the sails of the War on the Poor’s efforts to reduce long-term deficits (or, worse, finance even more tax cuts for the wealthy) by cutting effective income-support policies like the Earned Income Tax Credit that help low-income families make ends meet in an era of stagnating wages and ever-fewer opportunities to move into — and remain in — the middle class.

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