Helping People with Low Incomes Navigate Benefit Cliffs: Lessons Learned Deploying a Marginal Tax Rate Calculator
This report details findings and lessons from a project to develop a calculator to help people anticipate how a change in earnings from employment would affect their net income and information on their estimated effective marginal tax rate.
The document describes the development and deployment of a Marginal Tax Rate Calculator aimed at helping low-income individuals and their caseworkers understand how changes in earnings impact net income, benefits, and effective marginal tax rates, including the risk of “benefit cliffs.”
The calculator is customized for various jurisdictions, covers most major federal and local means-tested benefits, and highlights the importance of balancing flexibility with user-friendliness, maintaining ongoing policy updates, and ensuring sufficient IT and policy expertise for successful implementation and maintenance.
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