zlacker

> I struggle with the child tax credits. If I'm childless and move from 99,999 to 100,000 it doesn't change my situation at all. I don't think we can view that in the same light - it's a tax credit benefit, but it's not just a matter of earnings. The goal is to support lower income families, so the line has to be drawn somewhere, and whether it's gradual or not someone is still going to complain about it going away.

Having it go away is less of a problem than having it go away all at once. If it was phased out over a range of incomes such that every marginal dollar of gross is still a marginal increase in net, that'd solve the problem mentioned in this thread. Key property of a tax system: the function from gross income to net income should always be monotonically increasing.

>>JoshTr+(OP)
To be fair, the original topic of this thread was "tax traps", one of the most famous in the UK being a gradual decrease of benefit that was still a marginal increase in net, but it was still deemed worth complaining about.

>>Sketch+k6
Yeah, to some extent it's also important that the marginal tax rate should always be monotonically nondecreasing. But that's not quite as critical as the marginal tax rate never being above 100% (including all accounting for loss of credits/deductions).