Navigation Links
Tax Rates Mean Extra Work Doesn't Pay

Lower-Income Workers Are Hit Especially Hard, According to New NCPA Study

DALLAS, April 16 /PRNewswire-USNewswire/ -- The U.S. tax and welfare systems impose the greatest penalties on low-income workers when they work extra hours to get ahead, according to a study published today by the National Center for Policy Analysis.

"The impact on low-income workers and their families is especially brutal," said NCPA Senior Fellow Laurence Kotlikoff, Boston University professor and author of the study. "They can and often do wind up earning pennies on the dollar."

The study concludes that effective marginal tax rate, the rate of taxation for each additional dollar earned, is higher for all workers but substantially higher for lower-income workers than higher-income workers. The study also shows that much of the higher marginal tax rates for lower-income Americans are caused by the loss of eligibility for government transfer programs, especially Medicaid.

-- For 30-year-old couples earning $20,000 the marginal tax rate is 42.5 percent, but for those earning $50,000 per year it's nearly half that -- 24.4 percent.

-- At age 45, couples earning $30,000 per year face a 41.8 percent marginal tax rate; the rate for those earning $200,000 is 35.9 percent.

In addition, single-parent households who qualify for more benefit programs than couples face even higher high marginal tax rates beginning at lower incomes. For example:

-- A 30-year-old single parent earning $10,000 per year pays 72.3 cents of every additional dollar earned in taxes due to the loss of welfare benefits. If the same parent earned $200,000 he or she would pay only 36.9 cents of each additional dollar in taxes.

-- At 45 years of age, the single parent earning $20,000 pays 42.9 cents in taxes of every additional dollar earned.

-- At 60, the single parent earning $10,000 pays 50.9 cents in taxes for each additional dollar earned. But if he or she were earning $200,000, they'd pay 43.2 cents in taxes.

"Any American trying to move up the income ladder should be rewarded, not punished with astronomical taxes," Kotlikoff added. "The bottom line is that not only are we penalizing the workers who need extra income, we are punishing them when they need it most."

The study can be accessed at

The NCPA is an internationally known nonprofit, nonpartisan research institute with offices in Dallas and Washington, D. C. that advocates private solutions to public policy problems. We depend on the contributions of individuals, corporations and foundations that share our mission. The NCPA accepts no government grants.

SOURCE National Center for Policy Analysis
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Combining liver cancer treatments doubles survival rates, UVA researchers find
2. Texas Health Care Association: New Report on Long Term Care Workforce Spotlights Need to Boost Texas Medicaid Rates
3. Breakaway Technologies Celebrates 10 Years in Business
4. Few Countries on Track to Curb Maternal, Child Mortality Rates
5. Jackson Hewitt(R) Celebrates Healthcare Workers With Occupation-Based Tax Savings
6. NEJM study demonstrates carotid stenting with embolic protection is comparable to surgery
7. YMCA of the USA Celebrates YMCA Healthy Kids(R) Day, the Nations Largest Health Day for Children and Families
8. Partnership for Prescription Assistance Celebrates Three Year Anniversary; Helps Nearly 5 Million Uninsured Patients Across United States
9. Preliminary Data From Pitt County Memorial Hospital Study Show Benefit of Active Surveillance on Reducing MRSA VAP Rates in Surgical ICU
10. Researchers learn how signaling molecule orchestrates breast cancers spread
11. Prenatal syphilis screening rates: Are they being accurately reported?
Post Your Comments:
(Date:11/28/2015)... ... , ... Beginning November 30th at 6:00 a.m. EST until 11:59 p.m. EST, ... of up to 20% off orders $80 or more to free gifts with purchases, there ... , As a competitive e-commerce website for skin care and cosmetic needs, customers will save ...
(Date:11/27/2015)... ... November 27, 2015 , ... According to an article published November ... meeting in Washington D.C. revolved around the fact that proper dental care, both at-home ... stressed the link between periodontal disease (more commonly referred to as gum disease) and ...
(Date:11/27/2015)... ... November 27, 2015 , ... The ... in America. As people age, more care is needed, especially with Alzheimer’s, dementia ... medical professionals are being overworked. The forgotten part of this equation: 80 percent ...
(Date:11/27/2015)... (PRWEB) , ... November 27, 2015 , ... ... filthy the toilets were," said an inventor from Hillside, N.J. "Many people catch ... seat cover so that individuals will always be protected from germs." , He ...
(Date:11/27/2015)... ... November 27, 2015 , ... ProSidebar: Fashion is ... Pro X. With ProSidebar: Fasion, video editors can easily add an informative sidebar ... minimalist title opener. Utilize presets featuring self-animating drop zones, lines, bars, and text ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... India , November 27, ... --> --> ... personal emergency response system (PERS) ... steadily for 5 years with ... region expected to see a ...
(Date:11/26/2015)... -- --> --> Juntendo ... optimal contrast weighting of MRI for patients with Multiple ... research agreement with SyntheticMR in order to use SyMRI in ... possible to generate multiple contrast images from a single scan ... thus making it possible to both fine tune images and ...
(Date:11/26/2015)... 2015 ... the  "2016 Future Horizons and Growth ... Testing Market: Supplier Shares, Competitive Intelligence, ... --> ) has ... Future Horizons and Growth Strategies in ...
Breaking Medicine Technology: