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Friday the 13th isn't frightening.

November 13, 2009

Not compared to this:

20091113-1.png

This chart, produced by the libertarian Ludwig von Mises Institute (via the TaxProf), illustrates hidden taxes that occur at lower income levels. Their illustration, featuring a hypothetical single Virginia parent with two kids, treats the loss of means-tested welfare benefits as income increases as a "tax." The loss of benefits such as the Earned Income Credit, food stamps, Medicaid, and Section 8 housing subsidies exceeds 100% of income over most of the income range from $20,000 to $45,000, according to the Institute.

Unless something is badly wrong with the chart, something is badly wrong with our public policy. It's more likely the public policy. What to do? Arnold Kling says:

There are two potential solutions. One solution is to base eligibility for means-tested benefits on total income, including other government benefits programs. Another approach would be to abolish a lot of specific programs and replace them with generic cash assistance.

Maybe some of both.

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Comments

Wow, the poor- poor!! After reading most of the posts on this website I was beginning to feel sorry for the rich and their tax plight!! (NOT)!

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