How the Census Overcounts Poverty

Census poverty figures use a narrow measurement of income that leaves out many major anti-poverty programs that are run through the tax code and leave millions of Americans with more money after federal taxes. One out of seven Americans are officially in poverty, according to the new report, but one out of ten taxpayers receive tax payments in the form of refundable tax credits that are greater than what they owe in income and payroll taxes. That is, their tax bill makes them money.

An individual's income may put that person below the poverty line, according to the Census measure. But that measure ignores the on-the-ground effects of some of the most critical anti-poverty weapons, most notably the Earned Income Tax Credit, Medicaid, food stamps, and housing subsidies. Recently, for example, the EITC alone provided more than $40 billion annually to the working poor.

By excluding these benefits, the Census poverty figures fail to recognize that these programs lift many people out of actual poverty.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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