As a household's income approaches the poverty line and rises above it, families on various welfare programs can actually face effective marginal tax rates of 50 or 60 percent (see this CBO report for the details).

How effective is welfare?

A recent review of these studies conducted by the U.S. Department of Health and Human Services indicates that the employment rate among welfare leavers is approximately 60 percent just after exiting welfare.

Are social welfare programs effective?

Research suggests that various economic security programs not only help families address their basic needs today, but also can have longer-term positive effects on children, improving their health and helping them do better (and go farther) in school, thereby boosting their expected earnings as adults.