Using several types of public policies, the government has attempted to alleviat

Question

Using several types of public policies, the government has attempted to alleviate poverty, with varying success. One example is antipoverty programs intended to supplement family income. An important effect of this type of policy is that it can result in___.effective marginal tax rates that can harm incentives toward work. One adjustment that can be made is to gradually reduce benefits as incomes rise. However, the more gradual the phase-out of benefits, the____the burden on taxpayers. A similar issue occurs with in-kind transfers. By providing the poor with food and shelter, taxpayers can be more confident that they are not supporting harmful addictions. However, the success of in-kind transfers hinges on the poor needing these goods or services in order to avoid___

Explanation / Answer

1. HIGHER EFFECTIVE MARGINAL TAX RATES.

2. MORE IS THE BURDEN ON TAX PAYERS.

3. STARVATION.

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