Why Work?
Via Veronique de Rugy at The Corner comes a summary of Wyatt Emmerich’s analysis of disposable income for a one-parent family of three with earned incomes of $3,625, $14,500, $30,000, and $60,000. The analysis excludes benefits from SSI. The conclusion is that work does not pay.
The government taxes employers for hiring. They tax employees for working. And they pay people who aren’t working. The world seems turned upside down.
Sizable transfer payments for low-income families provide a disincentive to working. As these payments are withdrawn as incomes rise, the effect is the same as high-marginal tax rates that further discourage working.
If one adds in work transportation costs and health care costs (versus Medicaid benefits), not working pays a lot more.
Wow! In this case a table is worth a thousand words.
It seems as though this table was based on people living in Mississippi (Mississippi income tax-line item three) which is a red state and an overall recipient of welfare to the burden of other contributory states.
Republicans are running a welfare state?
Who would have guessed?
Erik, the results would be much worse in other states with higher eligibility levels and more generous benefits.
Ken,
put your crystal ball away. Here in California if we did not have to be a net tax contributor we would be in much better shape, and net tax recipients like Mississippi would be much worse off.
We here on the left coast support those American red, white and blue republican states. We feed them, cloth them, educate them and allow them to feel secure. So all I can say to Mississippi is “who’s your daddy, Y’all?”
Erik, if you work and pay taxes, feel free to move to the hinterland. Pretty soon California is not going to have any taxpayers left.
Vicki,
I live in the greatest state of this republic so why should I leave, we here on the golden coast will continue to do our part to keep this nation great. We are the American economy and we shall overcome.
What I would like to see happen, is those net tax recipient welfare states (which happens to be in the republican stronghold of southern states) get their house in order. As a wise man once said, a rising tide lifts all boats.
Erik,
Are you therefore in favor of ending the EITC, food stamps, rent subsidies, agricultural assistance, the school lunch program, head start, section 8 housing subsidies, Title 1 education subsidies, TANF, and Medicare, Medicaid, and SCHIP? These are the federal transfer programs which send such large sums to what you call the “recipient states.”