>In the US at least all the rates are marginal. The only "disincentive to work" is completely psychological and made up. If you make more money, you get more mo

>In the US at least all the rates are marginal. The only "disincentive to work" is completely psychological and made up. If you make more money, you get more money. There is no financial scenario where you make $1 more and lose anything close to $1 in government benefits, tax credits, etc. Well there's at least one, though you're generally right that welfare cliffs have been all but eliminated in the US. That said, here in Charlottesville our healthcare.gov market fell apart for 2018 and the one remaining insurer's second-cheapest silver plan is a tad over $10,000 per year. Under 400% of the federal poverty level, the ACA guarantees a subsidy of the difference between the second-cheapest silver plan premium and a certain percentage of your income (sliding scale, but no higher than 9.56%). That means if you're at 400% of the poverty line, $48,240 for a single-person household in 2018, your premiums are capped at $4,612 and thus you receive a subsidy for $5,468. At 401% of the poverty line, you get nothing. Thus, effective marginal tax rates are >100% between $48,240 and $53,709 — it does not make sense to earn any more than the lowest end of that range. A bit of an extreme case that won't hold in more functional markets, but... personally frustrating. /rant