Recipients in 39 states can accept benefits while employed.
Welfare benefits and the loss of leisure time still act as disincentives to earning a salary despite improvements in the welfare-work tradeoff since federal reforms in 1996, according to a report published Monday.
The report by the Cato Institute found that the equivalent wage value of welfare has increased in 33 states since 1995, when the think tank first released a report on the issue. Benefits in the District of Columbia expanded by $6,850 to a total package equivalent to $50,820 in wages, the second largest increase behind Vermont.
Welfare “pays” more than $15 per hour in 13 states.
However, the report also notes that welfare recipients in 39 states can accept a job paying slightly less than welfare without losing income. That is a result of state and federal tax credits, such as the Earned Income Tax Credit and the Child Tax Credit, which are designed to encourage working and childbearing.
Still, those tax incentives for work are often outweighed by the remaining tax burden and the loss of leisure, said Michael Tanner, a senior fellow at the Cato Institute and coauthor of the report, in an interview.
“The benefit package is so large and the tax burden so high that it doesn’t make that much of a difference,” Tanner told the Free Beacon.
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