It functions like a tax in that it decreases the net amount that you receive for working (more). If you lose 40 cents' worth of benefits for every additional do

It functions like a tax in that it decreases the net amount that you receive for working (more). If you lose 40 cents' worth of benefits for every additional dollar that you earn, it doesn't matter that your "real" marginal tax rate is only 25% - earning an additional pre-tax dollar only makes you 35 cents richer, just as it would if your marginal tax rate were 65%. Also, while some of those benefits are less fungible, others have phase-outs that are functionally identical to taxes at the margin. For example, if you get subsidized health insurance through healthcare.gov, every additional dollar that you earn directly reduces your tax refund by up to ten cents, on top of your marginal tax rate.