Unforeseen Secondary Effects

In this post at RealClearPolicy, Robert VerBruggen makes an observation that hadn’t occurred to me. The major, presumably unforeseen effect of increasing the minimum wage from $7.25 an hour to $10.10 an hour (a figure frequently encountered) would be to increase the marginal federal tax rate on the lowest income earners:

The point of this post isn’t to argue one way or another about whether the federal minimum wage should be raised or not. There are solid arguments both ways. I don’t think there’s a solid argument that our tax system should be as regressive as it is and as this graph above depicts so powerfully.

Major tax reform, like healthcare reform, typically occurs about once a generation in this country. We’re due.

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    Wasn’t expected bracket creep a feature of the Carter Administration’s budget projections?

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    Major tax reform, like healthcare reform, typically occurs about once a generation in this country. We’re due.

    That is depressing. On one side we have politicians who brag about not reading their bills, who tell the voters to embrace the suck, and who -when given effectively unlimited resources and three and a half years time – can’t develop a fucking website, and on the other side we have, God help us, the Republican Party. If this crop of leaders do tax reform it will have all the wonderful features of the Iraq occupation and healthcare.gov.

    Not to mention that now that the IRS is solely at the discretion of the President to punish his enemies the whole thing will only be applied to those that don’t give His Exulted Majesty money.

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