Income security in the United States is affected by both income transfer policy and tax policy. Transfer payments have reduced the incidence of poverty in the United States. The nonmetro poverty rates, however, remains higher than the metro poverty rate, even after considering growing in-kind transfers. Additionally, nonmetro areas depend heavily on transfer payments for personal income. Because adjustments in tax policy have not kept pace with inflation, the working poor have paid an increasing share of their income in taxes. This is particularly important for nonmetro areas, as most of their poor families contain at least one worker. The effects of changes in income transfer policy and tax policy on the nonmetro poor are discussed, and, where the data permits, information on the southern United States is examined.

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