What is Effective Marginal Tax Rate(EMTR)?
Effective marginal tax rate is calculated as the combined effect of the mandates, taxes and the phased out governmental subsidies. As we shall see, these items have a detrimental impact on workers incentive to earn additional income. There is substantial evidence that shows that a higher EMTR discourages workers from working harder to climb the economic ladder. The Individual Mandate While the people on Capital Hill and in the White House are loath to classify this as a tax, that’s what it is. The federal government will exercise its power and order people to purchase health insurance. If people choose not to purchase it, they will be hit with a fine. However you want to spin it, its a tax. The Taxes & Subsidies These bills will require low and middle income workers to pay a percentage of their income toward this mandatory health insurance. The percentage paid will rise as the workers income rises thus consuming a larger share of each additional dollar earned. This tax also rises with
