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

[telemann.livejournal.com]

You should post this over in politicsforum, it can get very cunty there though, but there are some intelligent folks there too.

[dr-scott.livejournal.com]

That doesn't sound like much fun! I've wasted enough time on Usenet and blogs over the years... mostly I want to highlight items that haven't drawn much mainstream attention, not turn into a policy blogger full-time.