More on that Implicit Tax Rate

Clifford Thies has put together two remarkable graphs depicting the implicit marginal tax rate for the working poor when you take into account "the loss of means-tested benefits (e.g., cash assistance, food stamps, housing subsidies, and health insurance), and the taxes that people pay on earned income". Once you take those factors into account, "the return to working is essentially zero for those in the lower two quintiles of the income distribution."

See the graphs and read the article here.

So our approach to solving unemployment is to make it increasingly expensive to hire AND increasingly expensive to work. Not sure this is a winning formula.