Combined tax rates and AFDC recipients.

Welfare and AFDC recipients are burdened with tax rates that actually discourage full-time work by phasing out needed benefits such as food stamps, housing subsidies, and Medicaid. The earned income tax credit benefits the working poor the most at minimum wage levels, but phases outs at higher income levels. The best approach for low-income wage earners may be to work part-time, for example 30 hours a week at minimum wage, while remaining eligible for Medicaid or similar benefits.