Leslilake1 at aol.com wrote:
>bush tonight says a waitress with two kids making $25,000 - if she tries to
>better her situation, every dollar she makes over $25,000 is taxed at 50% -
>sending the awful message - "you can't get ahead."
>
>can this be true?
-No. No one is in a 50% federal tax bracket. The highest marginal rate -is 39%, and that's well beyond the point where you pay SS taxes. Did -he really say that?
Yes, they are. You are forgetting about the EITC phaseout, which would still be at 20% for a single Mom with two kids at $25,000. She would face:
EITC Phaseout- 20% Income Tax- 15% FICA (inc. empl side) 15% ------------------------------ Total 50%
It is true and a serious problem that the working poor due have such abysmal marginal tax rates. It's nice that Bush mentioned it, yet his tax plans do remarkably little to alleviate the problem and nothing to alleviate the marriage penalty of the working poor who marry and often lose the EITC. Max has calculations that show some poor couples can lose over $6000 of income just by getting married.
-- Nathan Newman