The Welfare Cliff(s)…

After viewing the entirety of “Welfare’s Failure and Solution” (linked below) I found the graph below to be the most informative…and frightening.

image

The x-axis lists raw, unadjusted income and the y-axis lists income after taxes/entitlements. Ignoring the entitlements, we see that even though we have a progressive tax system, there is still incentive to climb the income ladder (each blue bar is higher than the blue bar before it). If we consider the entitlements, we see that several “cliffs” form on the chart (I count 4). These cliffs represent a disincentive to move up in unadjusted income.

http://www.scribd.com/doc/114628958/welfare-failure 

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