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>This creates a steep marginal tax rate (100%), which still results in a disincentive to work. ? This is not the system being described.
by bobkazamakis 4y ago
>This creates a steep marginal tax rate (100%), which still results in a disincentive to work.
?
This is not the system being described.
- scarmig 4y agoSuppose you get $10kpa in SSDI, and the system described is in place. You then start working part-time and get paid $10kpa. What is your increased take home pay? $0; the effective marginal tax rate was 100% for dollars 0-10000 you earned. That means there's no incentive to take up a low paying but still useful job.
- mlyle 4y agoIt could be even worse; SSDI isn't taxable, but you'll be paying various payroll taxes on that $10k. So possibly over 100%.