Yes, the less surplus income people have, the greater is their marginal propensity to spend.
> Certainly with the lack of incentives for savers
The US tax system has such extreme incentives for saving and investment as opposed to spending that any statement that starts this way is worth nothing but a laugh.
People with very little extra money to save likely can't take the risks or costs associated with equities investment anyway, so really they only get exposure to interest rates in savings accounts and CDs, which are being kept artificially low. If you only can save <$1,000 per year, you likely care a lot more about the interest rate on savings accounts than you do about how 401k matching is taxed.
Ex. Section 8 housing vouchers, CHIP (Children's Health Insurance Program), subsidized child care, among other.
Put together there are many cases where someone is better off earning less but receiving more benefits. In the cited example a single mom will earn the same net income whether she earns $29k gross or $69k gross.
(See the bottom of the document) http://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs.h...
http://www.aei.org/files/2012/07/11/-alexander-presentation_...
Can you elaborate?
Resource limit for SNAP: http://www.dpw.state.pa.us/foradults/supplementalnutritionas... -- translation: "Have less savings, get SNAP".
Patient Assistance Programs at hospitals: http://abcnews.go.com/blogs/health/2013/03/28/real-money-hid... -- translation: the government says your hospital has to "give back to the community" by not making you pay your bill if you say you can't.