I'm afraid it's not that simple. The key is the Effective Marginal Tax Rate, which is the compounded effect of withdrawal of benefits and moving up to a differe

I'm afraid it's not that simple. The key is the Effective Marginal Tax Rate, which is the compounded effect of withdrawal of benefits and moving up to a different tax bracket. Depending on the prevailing settings it's not uncommon to find points at which the EMTR is more than 100%. I ran for the Federal Parliament for a libertarian party in 2007 largely because I supported their policy plan to reform taxation and welfare jointly. The concept was called "30/30": a 30% flat income tax, with negative income tax at 30% below $30,000 income. Capital gains and company tax would also be set at a flat 30%. The gist was to remove all distortions from different tax and welfare settings, so that any taxpayer was always facing the same deal: each additional dollar earned is taxed at 30%. There were a lot of policies I didn't agree with, and naturally, those were the ones I got the most questions about. Running for a microparty that grabs anyone who puts their hand up is an ... interesting ... experience. (I came second last with a whopping 0.7% of the primary vote, for those who were wondering)