ABSTRACT

This paper highlights a bigger problem than benefits cliffs for people receiving government assistance, which we call “disincentive deserts.” These “deserts” are long ranges of work effort with 90–100% effective marginal tax rates (EMTRs). Using a tax/federal benefits simulator developed for Forsyth County, NC, we show that EMTRs for individuals receiving benefits range between 90% and 100% through a vast range of income. A rational individual would never work more than part-time, according to indifference curve theory. We discuss opportunities for the private sector to reconsider rewards for employees, since wage increases may harm some low-income workers because of cuts in their government benefits.

摘要

本文强调了一个比接受政府援助的人的福利悬崖更大的问题，我们称之为“抑制性沙漠”。这些“沙漠”是具有 90-100% 有效边际税率 (EMTR) 的长期工作量。使用为北卡罗来纳州福赛斯县开发的税收/联邦福利模拟器，我们表明，通过广泛的收入，领取福利的个人的 EMTR 范围在 90% 到 100% 之间。根据无差异曲线理论，一个理性的人永远不会工作超过兼职。我们讨论了私营部门重新考虑员工奖励的机会，因为工资上涨可能会因为政府福利的削减而伤害一些低收入工人。