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Safety Net Programs and Marginal Tax Rates: Perspectives of Working Parents

ASPE partnered with Insight Policy Research to conduct nine focus groups in 2019 with a convenience sample of working parents with at least one child under age 13. We sought to better understand their perceptions of marginal tax rates and benefit reductions, and how these perceptions appear to influence labor force decisions. Marginal tax rates refer to how much of new earnings are effectively reduced by income tax, payroll tax, and – the focus of this study – a reduction in government benefits. Focus group participants (n = 44) received one or more of the following benefits: Supplemental Nutrition Assistance Program, Medicaid/Children’s Health Insurance, Earned Income Tax Credits, rental assistance, child care subsidies, and Temporary Assistance for Needy Families. Focus groups were conducted in Ohio, Virginia, and California.