skip to Main Content

Relationship Between Tax Entry Thresholds and Poverty

The tax entry threshold is the amount of income a family can earn prior to owing federal income taxes. The poverty threshold is considered to be the minimum dollar amount needed for individuals, couples, or families to purchase food and meet other basic needs. The poverty level increases with family size. How the two relate provides one way to measure how the tax system treats low-income families. If the tax entry threshold falls below the poverty threshold, policy makers might be concerned that low-income families are being asked to pay too much tax.

Back To Top