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Helping People with Low Incomes Navigate Benefit Cliffs: Lessons Learned Deploying a Marginal Tax Rate Calculator

Publication Date
Authors
Nina Chien, Seth Hartig, and Anne Chamberlain

This project developed a calculator to help people anticipate how a change in earnings from employment would affect their net income, and in so doing, provide public benefit recipients with their estimated effective marginal tax rate on new earnings.

Key Points:

  • The calculator was designed to support program participants and caseworkers. Policy makers and program administrators may also find the calculator useful.
  • Calculators were fully developed for New Hampshire, Maine, Allegheny County in Pennsylvania, and Washington, D.C., and completely customized for their local programs and rules.
  • The resulting calculators captured most major federal and local means-tested benefit programs. See demo calculators here: http://frs.nccp.org/tools/mtrc/
  • Local governments and local organizations can download the open-source code (https://github.com/HHS/effective-marginal-tax-rate-calculator) to start creating a customized calculator for their families.
  • Lessons learned from developing the calculator include: being mindful of the trade-off between the calculator’s flexibility and user-friendliness; setting aside adequate time and resources to develop useful “next steps” for users who have their results in hand; and being mindful that web hosting the tool requires a high level of IT capacity from state and local governments.

Related Products:

Files
Helping People with Low Incomes Navigate Benefit Cliffs (pdf, 436 KB)
Topics
Employment & Self-Sufficiency | Social Safety Net | Marginal Tax Rates & Program Cliffs
Product Type
ASPE Issue Brief
Populations
Children | Fathers | Infants & Toddlers | Men | Mothers | Parents | Women | Working Age Adults | Youth | Low-Income Populations
Program
Child Care and Development Block Grant (CCDBG) | Child Care Development Fund (CCDF) | Children's Health Insurance Program (CHIP) | Earned Income Tax Credit (EITC) | Head Start | Health Insurance Marketplace | Housing Choice - Voucher Programs | Low-Income Home Energy Assistance Program (LIHEAP) | Medicaid | Supplemental Nutrition Assistance Program (SNAP) | Supplemental Security Income (SSI) | Temporary Assistance for Needy Families (TANF) | Unemployment Insurance (UI) | Women, Infants, and Children (WIC)