Marginal tax rates of 70% for the working poor

[drscott]

Greg Mankiw points to this back-of-the-envelope calculation that suggests the working poor will find 70% of their increased income taxed or clawed back under the proposed health insurance reform bills (but since the details remain to be settled, a complete appraisal is not yet possible.)

This means many poor families will discover there's almost no incentive to taking a better, higher-paying job.

This, along with the high hidden tax in the form of compulsory, higher-cost insurance premiums for healthy younger people, makes this proposal one of the largest transfers of wealth in history from young working stiffs to over-50 slobs with lifelong bad habits.

While the proposals do allow for rewards to company-insured people who maintain good habits, on the whole it removes any financial incentive to maintain good diet and exercise habits for almost everyone else.

Comments

[pklexton.livejournal.com]

My instinct is to agree with your closing statement - and specifically chalk it up to bad eating habits. My own anecdotal experience tells me I don't think our exercise habits are horribly worse than Europeans (although we certainly spend more time in cars as opposed to walking), and if anything they are worse as regards smoking, but it's our eating habits that kill us. Frankly, fast food and junk food are just too cheap and plentiful and convenient in this country. Although the gap is closing, and they are getting tubbier by the day over there too.