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

Jon Stewart recently skewered [1] 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 [2]).

A group of Canadian researchers have recently added [3] to the growing pile of evidence [4] 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 [5]), 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 [6] 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:

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.