Small point on [1] - it's not only EITC, there are a number of benefits that are income-dependant where a small income increase could make you ineligible for a

Small point on [1] - it's not only EITC, there are a number of benefits that are income-dependant where a small income increase could make you ineligible for a ton of benefits. Effective marginal tax rates for people right around poverty line is crazy high for their income - because each additional dollar earned turns into lost benefits. https://fee.org/articles/the-welfare-trap-labyrinth-of-programs-punishes-work/ https://fee.org/articles/the-welfare-trap-labyrinth-of-progr... The tax rates still aren't 100% there but even something like 50% may seriously discourage people.