One Reason Why So Many People Are Not Working
Here are Casey B. Mulligan’s estimates of the impact of emergency unemployment compensation ending in December 2013:
They include:
[T]he fact that earning income on a job results in both additional taxes and withheld federal benefits. The higher the tax rate, the less is the incentive to work.
And things are about to get worse:
Even if the emergency program is allowed to expire on Jan. 1, it will be replaced by an even larger program — the Affordable Care Act — assisting the unemployed and others, including premium subsidies for health insurance.
Most people have jobs that provide health insurance and will be ineligible for premium subsidies for as long as they work. But as soon as they are fired, quit, retire or otherwise leave the payroll, they will be eligible for monthly assistance to pay for their health insurance premiums and out-of-pocket expenses.
For households between 100 and 400 percent of the poverty line ― that’s about half of households ― the new assistance will average about $110 a week, tax free (unlike unemployment benefits, which are taxable). Moreover, the premium assistance is not limited to 26 weeks; it can last for decades.
I remember learning about this in school. There is a relationship between when peoples’ benefit run out and when they get a job.
The CBO estimated 700,000 people would voluntarily leave the labor market due to the PPACA. Under the new health care law, many people will be able to retire early and continue to have health benefits (that cost them little) without having to be tied to employment.
“households between 100 and 400 percent of the poverty line ― that’s about half of households”
Its amazing to see how concentrated wealth is.
What do you mean?
It shows that the far majority of Americans don’t make that much money, and that once you attain wealth you start to make substantially more.
There’s also straight-up fewer jobs.
And a shift to seasonal and short-term work.
Which signals lower wages.
Which will mean lower tax revenue, which increases government incentives to raise them.
Which leads to a death spiral. More taxes leads to less employment which leads to less tax revenue which leads to more taxes.
“Moreover, the premium assistance is not limited to 26 weeks; it can last for decades”
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