Reps. Tom Petri (R-Wis.) and Niki Tsongas (D-Mass.) recently penned an editorial promoting their bipartisan Making Work and Marriage Pay Act, which would identify the best ways to reform the tax code to help the working poor.
Petri and Tsongas said they agreed with President Barack Obama when he said during his State of the Union address in February that he wanted to help low-income families find a path to long-term prosperity.
“We share the president’s vision,” Petri and Tsongas said. “No American should be deterred from marriage or from obtaining a better job because it could make him or her worse off. Marriage should be encouraged. Working harder and getting better jobs should be encouraged. But in some cases, the government’s policies have the opposite effect for low-income families.”
Most government benefits are tied to income levels, so the benefits either wane or disappear entirely begins to earn more money. For a family receiving aid from multiple programs, the loss of that aid can be a real hardship.
“[These benefit reductions] effectively act as high tax rates – reducing take-home pay for low-income workers – and create a disincentive to work harder,” Tsongas and Petri said. “Low-income families can thus find themselves in a situation where receiving a raise or promotion results in losing more in benefits than they receive in additional earnings.”
Tsongas and Petri cited an example where a single mother could lose money if she earned a raise or got married and added another stream of income to the household. Recognizing there are no easy solutions to the issue, Petri and Tsongas’ legislation would commission a study to identify potential solutions.
“This bill is an important first step toward better coordinating low-income benefits and helping American families avoid the poverty trap,” Tsongas and Petri said. “With bipartisan cooperation, we can make the necessary improvements to these programs so that they support, not hinder, individuals and families working to improve their lives.”