The Wall Street Journal:

Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, [Hah! That means you have to go read the whole thing; but it's short.—ed.] the marginal rate for millions of low- and middle-income workers would spike as they earn more income.

Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year.

Via Slublog, over at Ace's digs. Ace himself doesn't seem to be awake yet, and it's nearly eleven; should we worry?

Posted by: Attila Girl at 07:50 AM | No Comments | Add Comment
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