TITLE

Marginal Tax Rates Facing Low- and Moderate-Income Workers Who Participate in Means-Tested Transfer Programs

AUTHOR(S)
Holt, Stephen D.; Romich, Jennifer L.
PUB. DATE
June 2007
SOURCE
National Tax Journal;Jun2007, Vol. 60 Issue 2, p253
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The combination of a progressive tax system with credits for low-income workers and means-tested transfer programs can create high marginal tax rates (MTRs) on earned income. We document the extent and distribution of statutory and actual MTRs for Wisconsin households with earned income in 2000 using a unique data set of merged tax, transfer program, and wage data. Nearly a quarter of unmarried tax filers with two or more dependents face MTRs of 50 percent or greater. Households between 100 percent and 250 percent of the federal poverty threshold and those using multiple means-tested programs are more likely to face high rates.
ACCESSION #
25977865

 

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