On taxes, the poor generally face the highest effective marginal tax rates, as they lose benefits with dollars earned.
Also, there are tax rates, and then the percentage of gross income actually paid. Finally, there are the differential rates on pay for labor (higher), profit in capital gains (lower), and the value of property owned (zero, except for inflation induced “capital gains” and property taxes). I used to think it peculiar that labor (creating value) was taxed at a higher rate than owning, but now I see it as entirely predictable.
In my country, if you are unemployed, state pays the insurance for you, but if you start making money, you pay the mandatory insurance. So somewhere in between there is a cent gained that costs you hundreds of dollars. Of course many poor people try to avoid this, which probably contributes to high unemployment.
Just one of many things that shouldn’t happen in a rationally governed country...
On taxes, the poor generally face the highest effective marginal tax rates, as they lose benefits with dollars earned.
Also, there are tax rates, and then the percentage of gross income actually paid. Finally, there are the differential rates on pay for labor (higher), profit in capital gains (lower), and the value of property owned (zero, except for inflation induced “capital gains” and property taxes). I used to think it peculiar that labor (creating value) was taxed at a higher rate than owning, but now I see it as entirely predictable.
In my country, if you are unemployed, state pays the insurance for you, but if you start making money, you pay the mandatory insurance. So somewhere in between there is a cent gained that costs you hundreds of dollars. Of course many poor people try to avoid this, which probably contributes to high unemployment.
Just one of many things that shouldn’t happen in a rationally governed country...