Posted on 12/04/2025 1:53:20 PM PST by grundle
Our entire safety net is designed to catch people at the very bottom, but it sets a trap for anyone trying to climb out. As income rises from $40,000 to $100,000, benefits disappear faster than wages increase.
I call this The Valley of Death.
Let’s look at the transition for a family in New Jersey:
1. The View from $35,000 (The “Official” Poor)
At this income, the family is struggling, but the state provides a floor. They qualify for Medicaid (free healthcare). They receive SNAP (food stamps). They receive heavy childcare subsidies. Their deficits are real, but capped.
Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.
2. The Cliff at $45,000 (The Healthcare Trap)
The family earns a $10,000 raise. Good news? No. At this level, the parents lose Medicaid eligibility. Suddenly, they must pay premiums and deductibles.
Income Gain: +$10,000
Expense Increase: +$10,567
Net Result: They are poorer than before. The effective tax on this mobility is over 100%.
3. The Cliff at $65,000 (The Childcare Trap)
This is the breaker. The family works harder. They get promoted to $65,000. They are now solidly “Working Class.”
But at roughly this level, childcare subsidies vanish. They must now pay the full market rate for daycare.
Income Gain: +$20,000 (from $45k)
Expense Increase: +$28,000 (jumping from co-pays to full tuition)
Net Result: Total collapse.
When you run the net-income numbers, a family earning $100,000 is effectively in a worse monthly financial position than a family earning $40,000.
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The Anti-Federalists were right. Would James Madison have been so keen on getting the Constitution adopted if he could have foreseen what the federal government would turn into?
“ . As income rises from $40,000 to $100,000, benefits disappear faster than wages increase.”
Negative nonsense.
Not anymore. Trump changed that in the BBB. 80 hours minimum per month of work, or equivalent minimum earned based on your state median income, or you don't qualify - up to age 64 (used to be 55). And having a kid under 18 doesn't get you our of it, the kid has to be under 14.
And when most families run up against that, then our country has a demographic disaster or an immigration / cultural disaster.
(In my case, wifey and I planned to have 2 kids and adopt 1, choosing adoption for the “1” mainly to not be a hypocrite to our pro-life views. We ended up only being able to have one - she’s our own blood.)
Incremental tax rate greater then 100% will discourage economic activity and lead to labor black markets. You heard it here first.
No, you can't ... it doesn't exist.
The money you (an I and everybody else) paid or are paying went or is going directly into somebody's SS check. The only way you or I get anything is to take it from someone younger. It's government sponsored generational theft.
Then at $110,000 education expenses are no longer deductible.
Then at $150,000, most additional government benefits like the $2,000 payback is no longer available.
Literally, it does not pay to be a W-2 employee at high incomes. There are extremely few tax breaks and no “program” monies of any kind.
High income earners pay for everything. They not only pay most of the taxes paid, but they also get nothing back like the lower incomes.
Uh-huh. And what is the median family income in the US? Is 100k really all that much in today’s dollar?
Yep. Known that chart all my life.
It has only gotten worse with the polidiots buying more and more American and foreign votes.
Lol perhaps life choices and struggles with budgets might be an issue.
“Is 100k really all that much in today’s dollar?”
Considering $100k is about $1,800 a paycheck every two weeks after taxes and medical benefits, no, that much is not much these days.
They means test now with Medicare premiums if you have the audacity to earn too much- wham! Up go those premiums.
Oh yes, end the Social Security and Medicare and 99% of seniors vote Democrat.
Absolutely!
I can’t believe he didn’t include these considerations in his article. There’s also the long term capital gain and dividends which are ZERO below about 40k or 45k. There’s the obamacare subsidies which disappear instantly above a certain threshold. There’s foreign tax credits which can easily be fully claimed below $300, but which is subject to complex testing above $300 which someone earning less than $50k is probably not going to pass.
$32 Trillion in Government debt ain’t gonna spend itself.
All the foreigner-run restaurants I have been in are CASH ONLY
makes sense
Earn some money off the books, keep all the free shit paid for by others.
Yep, another example of insidious, but relentless, creeping SOCIALISM!
Yep. Stuck in that with health care right now.
If my business does well, the state no longer subsidizes a portion of my premium. We have to jump through hoops with our accountant to keep our income down...capital expenditures, purchase inventory, etc.
I will go from the ridiculous state of paying $75 a month for healthcare to $1800 a month if I cross the income threshold.
Stupid Obummercare.
My mom was a mother of us seven kids. When the last child was in his teens, she went to work as a secretary for small law firm. This was the 1980s, so I think she made about $5-6/hour. She did that for about 10-12 years. I estimate she maybe paid $10K into Social Security.
She then lived another 30 years after that. I am guessing she collected $250K over that time.
It's a Ponzi scheme, pure and simple. Its gonna crash some day.
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