The figures are for taxes and programs, taxes are the larger portion for the upper end of that range. (and would be even larger if all taxes where included but they aren't).
Medicaid is lost as you move up, that's part of the "effective tax rate" (not a good term, since its not all taxes or even anything that resembles taxes, but the effect is similar and I don't have a better term at hand) as is going down from the maximum SNAP payments, and then later loss of SCHIP. For those who get the subsided housing payments, you have another major factor, yes many don't, but your creating a negative incentive for those who do, and its far more than just a few.
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In response to your other post, if your story is true, you provide another example of the problem, people losing their benefits when their income increases (although in that case it seems to be an asset/income combination, or incremental income in addition to a larger amount of income earned earlier, income that low by itself wouldn't, or at least wouldn't normally, cause a cut off).
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Yes the whole thing was simplistic in assuming perfect benefit maximizers, which isn't the same as the typical low income person or family. Also they cherry picked the family composition in such a way as to make the issue more extreme. These points are only partially balanced by the fact that not all taxes where covered in the calculation (for example it included no sales or excise taxes). But while not typically as bad as the case laid in the earlier example, more and more people are facing an effective rate for taxes and lost benefits, that is fairly high, often beyond 50% and in a good number of cases well beyond 50% or for some income points and in some situations beyond 100% (in fact I know someone personally who is in a situation where she might lose money by gaining on the books income, in other words she faces a marginal rate, in the terms of the article, of over 100%).
The real point though is not so much the current situation, as the fact that as social program and taxation expand the problem will get bigger. For example the problem will be made worse if health care "reform" goes in to effect without a big change in how its set up. |
