In Fighting the 'Job Lock,' Democrats Opened a Poverty Trap | Cato Institute

In Fighting the 'Job Lock,' Democrats Opened a Poverty Trap | Cato Institute: "“the phase-out effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work.”

In fact, for those low-wage workers who fall into this phase-out range, CBO estimates that it will increase their marginal tax rate by an average of 12 percentage points. As CBO points out, “[f]or those workers, the loss of subsidies upon returning to a job with health insurance is an implicit tax on working.”"



"While there is no easy answer to the poverty trap, we should recognize that every time we raise taxes, and every time we set up a new welfare program, we help trap people deeper into poverty. We may make that poverty a bit more comfortable, but we make it harder for them to get out."