Posted by
John R. LaPlante on Wednesday, October 11, 2006 5:35:34 PM
State spending is too large when ... you can be in Medicaid and still have to pay the highest tax rate.
Some states have so-called progressive income tax rates; the more money you earn, the higher your tax rate. That is, not only will you pay more in total dollars, but more as a percentage of your income.
To what incomes do the highest rates apply? You may be surprised.
In Maine, the highest rate is 8.5 percent. (The Tax Foundation has a handy chart of income tax rates for the 50 states.)
So what income must you have to pay at this substantial rate—$1,000,000? $200,000? $177,000? No. Try $17,700. For a family of four, the federal poverty level is $20,000. As Bill Becker of the Maine Heritage Policy Center points out, you can be hit by the highest rate in Maine and still qualify for Medicaid.
Remarkable.
Note: This is one of a series of observations from the Education Reform Summit / Annual Meeting of the State Policy Network, held in Milwaukee during the week of October 2.