Alan Cole for the Tax Foundation: Everyone is familiar with the concept, if not the terminology, of a marginal tax rate. Earn a new dollar, and some of that dollar is lost to taxes. The concept applies equally to means-tested assistance from the government. As you earn more income, you lose some cash in the form of government benefits. What's unique about Obamacare -- and not in a good way -- is that you can actually earn a dollar more, and lose ten thousand dollars in benefits. The moment your modified [adjusted gross income] reaches 400% of the poverty line, you instantly lose a subsidy that could easily be worth $15,000. This is a discontinuity in public policy with respect to income. It is a place where an infinitesimal change can result in disastrous consequence for a taxpayer. At 400% of the poverty line, the marginal tax rate is infinite.
The result? We have reporters advising people to work less or to shift their capital gains from year to year in an effort to get their income under the magic threshold. ...
Students of good public policy know how to avoid infinite marginal tax rate cliffs.
Sadly, Obamacare is not good public policy.
MORE JUGGALOS COMING SOON
Daniel M. Rothschild for R Street: In February 2012, Cato Institute Vice President Gene Healy tweeted what may be the funniest think tank tweet to date: “Someday, the Think Tank Network' (TTN) will sponsor a reality show in which Charles Murray attends the Gathering of the Juggalos.'”
The idea of a television network devoted to reality shows starring think-tankers is funny on its face, especially to those of us who work in the industry. But coming on the heels of the American Enterprise Institute's Murray's bestselling book "Coming Apart: The State of White America, 1960-2010," Healy's tweet wasn't twee but trenchant. "Coming Apart" detailed a growing divide in America along class lines, with the classes separated by differing attitudes towards marriage, faith, work ethic and community.
And perhaps no group better exemplifies in the popular mind a rootless, work-shy, amoral underclass than the Juggalos, for whom the annual Gathering is something of a hedonistic hajj.
A bit of clarification may be due. For those unfamiliar with the term, Juggalos are (broadly speaking) fans of horrorcore rap-rockers the Insane Clown Posse. … The annual “Gathering of the Juggalos,” which since 2007 has been held in Cave-in-Rock, Ill., attracts tens of thousands of fans to an annual music festival that includes concerts as well as events ranging from bare-knuckle boxing to horrorcore karaoke. And, of course, plenty of alcohol- and drug-fueled fighting, fornicating and frolicking. ...
Societies have long birthed movements of the underclass that reject widely subscribed normative institutions. And if Charles Murray is right, America has developed a permanent underclass lacking ties to traditional structures of family, vocation, religion and community. Declaring oneself a Juggalo may well be an attempt, however misguided or futile, to find community and social structure outside traditional Western hierarchies.
BIG BANK, BIG LEGAL BILLS
Alan Pyke for thinkprogress: JP Morgan Chase spent more on legal bills than paying its staff in the third quarter of 2013, as the penalties and litigation costs stemming from numerous violations of industry rules outstripped the bank's core operating functions in scope.
The country’s largest bank reported a quarterly loss of $380 million last week primarily due to having spent or set aside a total of $9.3 billion for legal costs, including settlement payouts, relating to a variety of lawsuits and government charges against the firm. At 39 percent of the company’s $23.1 billion net revenue for the quarter, legal costs were the company’s largest expense. According to the official quarterly earnings report filed with the Securities and Exchange Commission, the bank spent $7.3 billion to pay its workforce and $947 million on rent and overhead costs for its facilities around the world.
A company’s largest expense “should get at the heart of what a firm does,” as business reporter Tim Fernholz wrote last week, noting that General Motors’ biggest expense is making cars and Apple’s is sales. JP Morgan’s core functions as a commercial bank, lender and investment powerhouse were overshadowed in this most recent earnings period by the legal costs of its high-profile errors and consumer abuses.