When Work Doesn’t Pay For The Middle Class
20th January 2010
Eighteen months after being laid off, Judith Lederman, a 50-year-old divorcee who lives in Scarsdale, N.Y., is ready to consider jobs paying half the $120,000 she earned as a publicity manager at Lord & Taylor. That’s mostly because she’s desperate, but it also makes sense when you consider how this country punishes work effort. While the first $60,000 of her income would be lightly taxed, the next $60,000 would be hit with what is in effect a 79% tax rate. Given a choice between a part-time or easy job paying $60,000 and a demanding, stress-ridden job paying $120,000, Lederman would be wise to take the former. In the tougher job she would be contributing twice as much to the economy. But she wouldn’t be doing herself much good. It would make more sense to take it easy and spend more time with her high school senior daughter, Casey.
We’re from the government, and we’re here to help … ourselves to your money.
Work isn’t the only middle-class virtue that is getting punished. The system penalizes savings, too–not just through taxes, but also through programs that reward debtors, the profligate and college families that show up at the financial aid office with empty pockets. Yet another series of tax and benefit rules penalizes marriage.