Tuesday, November 10, 2009

Enormous Implicit Marginal Tax Rates
Mike Rappaport

Here.  And those rates, which exceed 100 percent for many people, are calculated under existing law and before the health care monstronsity is passed, which makes matters much worse.


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Mike Rappaport


I am shocked that this concept is only now seeing the light of day. Conservatives have long known that the system of means-tested giveaways of every description lifts the standard of living of the non-working poor above that of the working poor when the disutility of having to work is factored in.

When we look at all the benefits accruing to the non-working so-called "poor," whether having to do with housing, health care, food, or anything else, we may wonder why so many lower-income workers bother at all. Would we not expect more and more people to give up, to feel that if being a layabout is good enough, then why not be a layabout too?

Posted by: Lou Gots | Nov 11, 2009 8:13:09 AM

Dan Shaviro pointed out the existence of outlandish marginal rates on the working poor some time ago. The effect of health care phaseouts will/would make this worse. It is possible to address such problems, as with the earned income credit, but not always politically feasible.

Posted by: mike livingston | Nov 11, 2009 10:16:57 AM