Navigation Links
Tax Rates Mean Extra Work Doesn't Pay
Date:4/16/2008

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 http://www.ncpa.org/sub/dpd/index.php?Article_ID=16209.

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:
*Name:
*Comment:
*Email:
(Date:2/8/2016)... ... February 08, 2016 , ... ... expansion into Canada to provide its range of unique and advantaged protective ... Quebec City that will provide bilingual customer service and marketing support. A new ...
(Date:2/8/2016)... ... February 08, 2016 , ... T.E.N., ... that nominations will be accepted February 8, 2016 through May 8, 2016 ... include the Information Security Executive® of the Year, which recognizes executives who ...
(Date:2/8/2016)... ... February 08, 2016 , ... GrassrootsHealth ... incidence rate of type 2 diabetes in the GrassrootsHealth cohort with substantially higher ... make a change in public health,” states Carole Baggerly, Director of GrassrootsHealth, “the ...
(Date:2/8/2016)... ... February 08, 2016 , ... The schedule is now online ... The AutismOne 2016 Conference, which is being held May 25-29 at the Loews Chicago ... about helpful interventions and causes of chronic illness in children. , Very recent articles ...
(Date:2/7/2016)... ... February 07, 2016 , ... ... added Kybella® to his medical and surgical expertise. Technically known as deoxycholic acid ... medication used as a non-surgical alternative for reduction of fat below the chin ...
Breaking Medicine News(10 mins):
(Date:2/5/2016)... 5, 2016  Despite the recent explosion in Big ... industries to embrace Big Data due to the inherent ... medical side, organizations have begun looking to Big Data ... to adherence. --> --> ... Practices, LLC, Big Data has started informing many decisions. ...
(Date:2/5/2016)... , Feb. 5, 2016  Redwood Scientific Technologies, Inc. ... product designed to help women balance their hormones. This ... technology. Jason Cardiff , President and ... able to help the millions of women across the ... effects of imbalanced hormones. Our research and development team ...
(Date:2/5/2016)... 5, 2016  ivWatch, a medical devices company, is one ... granted by Governor Terry McAuliffe,s office. ivWatch will ... 25th at an event to be held at the Science ... honors professionals and business that have made significant contributions to ... - http://photos.prnewswire.com/prnh/20160205/330117LOGO ...
Breaking Medicine Technology: