Ernst Blofeld wrote:
> On Feb 23, 11:05 am, Jeffrey Turner <jtur...@[EMAIL PROTECTED]
> wrote:
>
>>>Would you take this offer? Why or why not?
>>
>>It depends on what it meant to the country, the economy, my community
>>and me. And maybe what kind of work it was. I'm not sure what an
>>economy of 100% taxation would look like, so it's kind of hard to answer
>>questions about it.
>
>
> Actually, you can see something similar at low ends of the
> income distribution.
>
>
http://economics.about.com/b/2008/02/10/marginal-tax-rates-of-over-100.htm
> ---
> A front-page case study highlighted in the Toronto Star this week
> helps illuminate the problem. That example profiled the plight of an
> unemployed single mother, with two children, making roughly $14,000
> from welfare. Then comes a chance for the mother to take a $14,000/
> year part-time job. One of the teenage children also gets a part-time
> job, as well as a bursary-subsidized spot at a local university.
> Government policy should be encouraging such op****tunities: Employment
> and education are both paths out of poverty and welfare-dependency.
> But as the Star's numbers show, the family's net income barely rises
> at all as a result of these changes -- flat-lining near the $14,000
> level even though its nominal income has risen to $31,000. That's
> because the government claws back so many benefits as soon as the
> family starts climbing the economic ladder.
>
> This is a problem all over the country, not just in Ontario. On Nov.
> 22, there appeared on this page an op-ed by Jeremy Leonard,
> Christopher Ragan and France St-Hilaire, co-editors of A Canadian
> Priorities Agenda: Policy Choices to Improve Economic and Social Well-
> Being, published last month by the Institute for Research on Public
> Policy. As the authors wrote:
>
> "Effective marginal tax rates are remarkably high at very low levels
> of income. In fact, due to the interaction of various transfer
> programs, the effective tax rates are well in excess of 100% for
> certain annual income levels between $10,000 and $20,000. At income
> levels around $30,000, the effective marginal tax rate is about 80%.
> For any low-income Canadians facing marginal tax rates like this, what
> is the incentive to work harder and earn more?"
> ---
>
> Welfare recipients have at least some incentive to work because of the
> future prospect of rising above a welfare existence.
Maybe. But with "outsourcing" and "downsizing" and dead-end jobs it
isn't too much of a surprise - especially with tax rates _above_ 100%.
And it's much worse psychologically, because we were discussing
everyone having to pay 100% (I want to interject that the other lie in
the Laughable curve is that it obfuscates the difference between total
and marginal tax rates. A marginal tax rate of 100% on income over
five or ten million might also have a salutary effect further down the
income scale). The marginal tax rates in the U.S., where health
insurance is an issue, are probably worse than in Canada. But if
everyone was taxed at 100%, job duties might be spread more evenly and
pointy-haired bosses would soon find themselves outside of management.
I'm going to guess that the top-down, authoritative structure of many
workplaces might have to change if there were 100% taxation, and that
wouldn't be such a bad thing.
--Jeff
--
It is only those who have neither
fired a shot nor heard the shrieks
and groans of the wounded who cry
aloud for blood, more vengeance, more
desolation. War is hell.
--William Te***seh Sherman
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