$8,380

$8,920

$9,460

$10,000

$16,300

$15,040

$13,780

$12,520

$22,260

$10,000

4. The earned income tax credit works like this: a family receives a tax break that increases according to how

much they work. Families that work more get more. In that sense it loosens the poverty trap by

encouraging work. As families earn above the poverty level, the earned income tax credit is gradually

reduced. For those near-poor families, the earned income tax credit is a partial disincentive to work.

5. TANF attempts to loosen the poverty trap by providing incentives to work in other ways. Specifically, it

requires that people work (or complete their education) as a condition of receiving TANF benefits, and it

places a time limit on benefits.

Access for free at openstax.org
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6. A useful first step is to rank the households by income, from lowest to highest. Then, since there are 10
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