More About Arloc Sherman

Arloc Sherman

Sherman is a Senior Researcher focusing on family income trends, income support policies, and the causes and consequences of poverty.

Full bio and recent public appearances | Research archive at

Working-Family Tax Credits Make a Big Difference for Military Families

July 2, 2013 at 10:19 am

With policymakers considering overhauling the tax code this year, it’s worth noting that about one in four current or former armed forces families with children receive the Earned Income Tax Credit (EITC) and the low-income piece of the Child Tax Credit (CTC) — two key tax credits for low- and moderate-income working families.

Our new fact sheet gives state-by-state figures on how many active-duty and veteran families receive the credits.

Nationally, 1.5 million military families receive one of the credits, according to our analysis of Census Bureau and Internal Revenue Service data.  In about 280,000 of these families, a parent now serves in the armed forces; in the rest, a parent is a veteran.

The 1.5 million families contain about 3 million children under age 18.  They received, on average, about $2,650 per household from the EITC in 2011 and about $1,000 from the low-income portion of the Child Tax Credit.

Studies have found that children whose families receive more income support from the EITC tend to do better in school and are more likely to attend college and to earn more as adults.

For many active duty and veteran families, these credits make a major difference to their economic security:

  • The EITC and CTC together keep more than 140,000 military families — with nearly 300,000 children and 600,000 total family members — from falling below the poverty line, based on the federal government’s Supplemental Poverty Measure (SPM).  (The SPM, unlike the official poverty measure, counts tax credits as income.)
  • These credits reduce the severity of poverty for about another 800,000 members of military families.

In 2013, a married couple with two children may qualify for the EITC if it makes less than $48,378; it may qualify for the low-income portion of the CTC if it makes less than about $47,000.

Working-Family Tax Credits Lift Millions of Mothers — and Children — Out of Poverty

May 10, 2013 at 2:10 pm

With Mother’s Day approaching and policymakers considering overhauling the tax code this year, it’s worth noting that two key tax credits for low-income workers lifted 2.3 million mothers out of poverty in 2011 (the most recent year available), using a Census Bureau poverty measure that counts tax credits and government benefits.

Our new fact sheet gives state-by-state figures on how many mothers in working families benefit from those credits — the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).

The EITC and CTC not only help working parents make ends meet but are proven, powerful tools for reducing child poverty — lifting 4.9 million children out of poverty in 2011 — and advancing children’s long-term well-being.  Children of EITC recipients, for example, tend to do better in school, are likelier to attend college, and earn more as adults, research shows.

For more, see our backgrounders on the EITC and CTC.

Why Deficit Reduction Must Protect Effective Low-Income Programs

March 11, 2013 at 3:58 pm

With President Obama and lawmakers of both parties vowing to achieve further deficit reduction, the stakes are high for low- and moderate-income Americans.  Moreover, as we explain in a new paper, if deficit reduction targets programs that provide supports and foster opportunity for low-income families, the adverse effects could be felt for decades — and not just by the low-income families and individuals who receive this assistance.

The economy’s future strength will depend in part on tapping the talents of as many Americans as possible.  If we shortchange investments that expand opportunity, the nation and our economy will be weaker than otherwise.  As recent data and research show, various key federal programs both ameliorate poverty in the short run and have important positive impacts over the long run.

Census data show that, as a group, programs that help families struggling to afford the basics are effective at substantially reducing the number of poor and uninsured Americans.

Overall, public programs lifted 40 million people out of poverty in 2011, including almost 9 million children (see chart).  While Social Security lifted the largest number of people overall out of poverty, the Earned Income Tax Credit (EITC) lifted the largest number of children.  Together, the EITC and Child Tax Credit (CTC) lifted 9.4 million people — including nearly 5 million children — out of poverty in 2011.

In addition, Medicaid provided access to affordable health care to more than 60 million people in 2009; thanks to Medicaid and the Children’s Health Insurance Program (CHIP), children are much less likely to be uninsured than adults.

Some leading researchers in the field have conducted a comprehensive review of the available research and data on how safety net programs affect poverty.  They found that the safety net lowers the poverty rate by about 14 percentage points (even after accounting for any potential negative effects on work incentives, which the research finds to be small).  In other words, one of every seven Americans would be poor without the safety net.  That translates into more than 40 million people.

Policymakers can make some money-saving changes in programs for low- and moderate-income individuals or families without unduly burdening those populations.  But the achievable savings through greater efficiencies in means-tested programs are modest.  In particular, the largest means-tested program — Medicaid — already provides health care coverage at a substantially lower cost per beneficiary than private coverage.

A more balanced approach to deficit reduction that includes adequate new revenues to complement additional spending cuts can further reduce deficits while maintaining the resources to invest in key building blocks of future prosperity, including effective services and supports for poor families and children.

We’ll take a closer look at how the safety net supports work and its positive long-term effects in future posts.

Click here to read the full paper.

Most Poor Children Live in Households with Major Hardships

November 20, 2012 at 12:40 pm

With Thanksgiving right around the corner, this is an appropriate time to look at some new figures on hardship.  New CBPP analysis of monthly Census data finds that more than half (58 percent) of poor children last year lived in households that faced one or more of the following:

  • difficulty affording adequate food (what the Agriculture Department terms “low food security”),
  • overcrowded living conditions (more than one person per room),
  • falling behind on rent or mortgage, or
  • having gas or power service cut off due to inability to pay bills.

That 58 percent is three times the 17 percent rate for households with incomes at or above twice the poverty line, as the graph shows.

Many of these poor children live in working households.  Two-thirds of the poor children lived in households where at least one person was working at the time of this survey, and these working-poor households experienced hardships at about the same rate (59 percent) as poor families with children overall.

The food security data cover only part of 2011.  Agriculture Department data for the year as a whole show that 45 percent of all poor households with children had difficulty affording adequate food at some point in 2011.

Fortunately, government assistance makes a big difference in fighting poverty and hardship.

The Census Bureau reported earlier this month that government assistance programs kept millions of Americans out of poverty in 2011, under a new measure (the Supplemental Poverty Measure) that takes both cash and non-cash income into account.  CBPP analysis finds that nearly twice as many people would count as poor in 2011 if one left out the income they received from assistance programs.

In addition, six recession-fighting initiatives enacted in 2009 and 2010, including expansions in the Earned Income Tax Credit and Child Tax Credit, kept nearly 7 million people out of poverty in 2010.  Unfortunately, those initiatives are expiring, many states have cut programs that help low-income families, and some budget-cutters in Congress are targeting such programs for further cuts.

Antipoverty Programs Having Big Impact, New Government Poverty Measure Shows

November 14, 2012 at 2:38 pm

The Census Bureau today released data showing that SNAP (food stamps), the Earned Income Tax Credit (EITC), and unemployment insurance kept millions of Americans out of poverty in 2011, using a new poverty measure that counts taxes and non-cash government benefits.

These figures are particularly timely given the looming expiration of two key measures that account for part of these programs’ large antipoverty impact:  federal emergency unemployment insurance and the 2009 Recovery Act’s improvements in refundable tax credits like the EITC.

Letting these measures expire at year’s end could push large numbers of families into poverty.

For more details, see our Commentary on the Spotlight on Poverty and Opportunity website.