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June 3, 2013

Poverty-Fighting Efforts are Doing Their Job

Tax credits for working families and other poverty-fighting efforts like nutrition assistance are highly effective in keeping families afloat during tough financial times and in preventing poverty from being even worse than it is.

That’s one of the key findings of a new report by the Weldon Cooper Center at University of Virginia  that provides a more accurate picture of how many – and which – families in Virginia are struggling to make ends meet. This new measurement takes into account differences in the cost of living across Virginia and a fuller array of a family’s expenses (including medical costs, child care, and transportation expenses for working poor families) and counts additional resources (such as food stamps) that are not counted in the official poverty measure used by the federal government.

Based on Weldon Cooper’s new measure, tax credits for working families – such as the earned income tax credit and refunds received through the  child tax credit – do the most  to reduce poverty. These credits  keep over 150,000 Virginians out of poverty, reducing the state’s poverty rate by 17 percent. They also cut Virginia’s child poverty rate by a whopping 33 percent.


The credits boost individual and household income, which has long-lasting effects. For instance, prior studies have found that the earned income tax credit not only increases employment and earnings among low-income working-age women, but also improves the health, school performance and future adult earnings of young children in families that receive the credit.

Among non-tax poverty-fighting efforts, the Supplemental Nutrition Assistance Program (formerly known as “food stamps”) has the biggest  impact, keeping over 100,000 Virginians above the poverty line.

These new numbers are particularly important as Congress considers allowing SNAP benefits to fall. If Congress doesn’t fix the problem, on November 1 the average SNAP benefit will be reduced to only about $1.40 per person per meal. This cut will harm over 900,000 Virginians and remove $64 million from Virginia’s economy.

Too many working and retired families in Virginia don’t bring home enough in wages or Social Security income to stay out of poverty. As the new report shows, key tax breaks and services help bridge the gap between a family’s earned income and how much they need to pay the bills. And when these families have enough resources to pay their bills, it helps local businesses and communities, since almost all of their money goes to purchasing necessities. We need to keep these effective anti-poverty programs robust, not only to help families make ends meet but also to keep our slow economic recovery moving along.

Levi Goren

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