The Corner

Economy & Business

Tax Rates on the Working Poor

The editors of the Wall Street Journal highlight a new study estimating that a quarter of “low-wage workers face marginal net tax rates above 70 percent, effectively locking them into poverty.” If they make higher incomes, that is, they lose so much in government benefits as to leave them barely ahead.

The basic problem that the study tries to quantify has been understood for many years. Fixing it would require either cutting benefits for the poor or raising benefits for those higher on the income scale. Neither has been an attractive option for policymakers.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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