Odd jobs, and some of the not odd jobs are off the books or partially off the books and don't effect tax liability or benefits. Also not everyone with that income qualifies for extensive benefits (no kids, not in a very generous state, well you get very little) esp. without the addition of the health insurance mandates and subsidies that would come in with the current reform efforts if they get passed in to law.
And then of course even people who qualify aren't always going to be benefit maximizers, I've already stated that point more than once, pointing it out now isn't contradicting me or showing how I live in some different world. But for those who are benefit maximizers you create severe perverse incentives, and even for those who are not, and so who face effective rates of say "only" 75% that's still a big problem.
I personally have known people who faced the benefit trap, who received benefits and where afraid to go back to work, or to work more for extra income, because they would lose the benefits and might be worse off than before. The fact that it doesn't apply to every single low income person doesn't mean it doesn't apply to a lot of people, esp. if your talking about the broader problems of the high marginal tax rates, and not just the semi-voluntary unemployment I mention earlier in this paragraph. The more social programs we add on (assuming they are income sensitive), and the more taxes we add, the worse the problem gets. Right now its manageable, but we're creating incentives for more and more people to put their efforts in to gaming the system. |
