How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs. Personal Taxes

12/01/2001

Since all of the programs increased earnings, one might expect them to also increase income taxes, payroll taxes, and sales and excise taxes (there is no sales tax in Oregon). Federal tax payments, along with the Earned Income Tax Credit (EITC),(18) were imputed from the relevant earnings base using tax rates and rules for 1995.(19) As shown in Table 13.6, in fact, about half of the programs decreased income taxes by $53 (Columbus Traditional) to $340 (Riverside HCD) per sample member. In these cases, the expected increase in tax payments was outweighed by an increase in federal EITC payments to sample members. There was an increase in federal income taxes in the remaining sites, ranging from less than $1 (Columbus Integrated) to $62 (Atlanta HCD).