Why Work If You Are Poor?

 Government, moral hazard, spending, taxes  Tagged with: , , , ,
Nov 092009
 

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The Food Stamp Program served an average of 25...
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“If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin”

Charles Darwin

It is not good to be poor. Almost all people would say they would rather be rich. In a piece entitled, The Dead Zone: The Implicit Marginal Tax Rate, discusses the perverse incentives that the poor face. He explains (my emphasis added): “When you take into account the loss of means-tested benefits (e.g., cash assistance, food stamps, housing subsidies, and health insurance), and the taxes that people pay on earned income, the return to working is essentially zero for those in the lower two quintiles of the income distribution.” Poorness in this country may be an unfortunate condition, a rational choice and “our great sin.”

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