by w3woody

How deserving are the poor?

I’ve long contended that poverty is, in part, rational, if one looks at the implicit marginal tax rate of poor people–the effective cost to earn each additional dollar, once things like the loss of food stamps, state-funded child support, and other tax credits are factored in. If you faced an implicit marginal tax rate of almost 140%–meaning each additional dollar implies a lost of $1.40 due to taxes and loss of benefits–you’d do everything you can not to earn that additional dollar.