If I understand the argument correctly, he’s saying that at fairly low levels of income, if you regard the loss of government benefits as a “tax”, then the effective tax rate as you move from 11,000 of income to 15,000 of income, then you effectively pay as much as 60% “tax” on that marginal gain.
((income - taxes) minus lost benefits) = effective tax rate
Is that basically it?
“((income - taxes) minus lost benefits) = effective tax rate”
Your marginal tax rate is the change in net taxes per dollar change in income. So if your earned income goes up by 1,000, your taxes might go up $300 and you might lose $300 in SNAP benefits, so effectively, you are being taxed $600 on that added $1,000 in income (that is, your after-tax income really is only $400 once you’ve accounted for what you pay Uncle Sam and the amount of income you had to divert to pay for food previously paid for by Uncle Sam).