Dan Mitchell describes how withdrawal of welfare benefits as your income rises can create a tax cliff that discourages the unemployed from seeking more work.
A graphic from British newspaper The Spectator gives this example:
John 21, works 25 hours per week at a gross wage of £5.70 per hour.
Of which 63p in tax/National Insurance and £4.18 in benefits (housing and council tax) is withdrawn.
Net income from work: 89p per hour.
84% of wage is lost in tax and benefit withdrawal!
Read more at How the Welfare State Traps the Poor in Dependency, the British Version « International Liberty.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.