Inside Report (2)

Do heavy taxes on wages take away some of the blue-collar employee's incentive to work?

Yes, says David R. Kotok, an economic consultant in New Jersey. He cites the following example:

An unmarried, unskilled new worker in New Jersey is paid about $4 an hour - roughly $7,800 annually. From that the young worker must pay about $910 in US income taxes, a $156 state income tax, a $523 social security tax, and a $78 state unemployment and disability tax. Total: $1,667 in taxes. What's more, studies show that New Jersey workers averaged $1,185 a year in job-related expenses in 1981 - transportation, work clothes, meals, and so forth. Deducting this from the worker's net pay after taxes leaves only $4,948 a year, or about $ 95 a week.

If the worker loses his job, instead of that $95-a-week pay he can cash in on ''vacation.''m

You've read  of  free articles. Subscribe to continue.
QR Code to Inside Report (2)
Read this article in
QR Code to Subscription page
Start your subscription today