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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (74506)	1/26/2000 5:04:00 PM
From: Don Lloyd	Respond to of 132070

Les - The Earned Income Credit is simply another case of killing the people you're supposedly trying to help. By itself, the EIC would be plausible, but when subject to a rapid phaseout with income and combined with regular income and payroll taxes it tends to lock families at the edge of poverty by adding about 25 points to the marginal tax rate, driving it up above 60% for many families. In the past, when upper income taxpayers were subject to very high rates, they could almost always manage their income to reduce the effective rates. The recipients of the EIC have no such flexibility. Massachusetts has a similar and additive program called the 'Limited Income Credit', or LIC. In practice, the recipients see state marginal rates of 10% on ALL income, whereas higher income taxpayers see a 5.75% rate for ordinary income and as little as a 2% rate for LT capital gains. Regards, Don