Does It Pay to Save?

Studies | Taxes

No. 298
Friday, June 01, 2007
by Laurence J. Kotlikoff and David S. Rapson


Notes

  1. Based on the study by Laurence J. Kotlikoff and David S. Rapson, "Does It Pay, at the Margin, to Work and Save? Measuring Effective Marginal Taxes on Americans' Labor Supply and Saving," National Bureau of Economic Research, Working Paper No. 12533, December 2006; forthcoming in James M. Poterba, ed., Tax Policy and the Economy , Vol. 21 (Boston: MIT Press, 2007).
  2. For effective marginal taxes on labor, see Jagadeesh Gokhale, Laurence J. Kotlikoff and Alexi Sluchynsky, "Does It Pay to Work?" National Center for Policy Analysis, Policy Report No. 258, March 2003.  Available at http://www.ncpa.org/pub/st/st258/.
  3. Countable assets do not include one's primary residence, the first $10,000 of fair market value of a vehicle used as primary transportation, student grants or scholarships, household belongings (jewelry, furniture and so forth) and food stamps.
  4. Calculations based on Jocelyn Bauduy and Christine Somogyi, "Transitional Aid to Families with Dependent Children (TAFDC): Financial Eligibility Requirements," MassResources.org.  Available at http://www.massresources.org/pages.cfm?contentID=17&pageID=4%20&subpages=yes&SecondLeveldynamicID=351&DynamicID=349.  Access verified February 26, 2007.
  5. Jocelyn Bauduy and Christine Somogyi, "Food Stamps: Financial Eligibility Requirements," MassResources.org.  Available at http://www.massresources.org/pages.cfm?contentID=12&pageID=3%20&Subpages=yes&dynamicID=418.  All other households not mentioned in the above text must meet an asset limit of $2,000.  Households with a disabled person or a person age 60 or older must meet an asset limit of $3,000.
  6. 6 "State Assistance Programs for SSI Recipients, January 2005: Massachusetts," Social Security Administration, September 2005, Table 1. Available at http://www.ssa.gov/policy/docs/progdesc/ssi_st_asst/2005/ma.html.
  7. Jocelyn Bauduy and Christine Somogyi, "Supplemental Security Income: Financial Eligibility Requirements," MassResour
    ces.org, February 16, 2007. Available at http://www.massresources.org/pages.cfm?contentID=18&pageID=4%20&subpages=yes&SecondLeveldynamicID=359&DynamicID=357.
  8. "Understanding Supplemental Security Income, 2006 Edition" Social Security Administration, 2006, page 10. Available at http://www.ssa.gov/notices/supplemental-security-income/ussi-2006.pdf.
  9. Jocelyn Bauduy and Christine Somogyi, "Emergency Aid to Elders, Disabled and Children (EAEDC): An Overview," Mass
    Resources.org, January 10, 2007. Available at http://www.massresources.org/pages.cfm?contentID=16&pageID=4&Subpages=yes. 
  10. Medical benefits are provided by MassHealth, the state health insurance program.
  11. Caregivers in disabled households are eligible for EAEDC but not for TAFDC.
  12. "Retirement: Saver's Credit," University of Washington, Human Resources, undated.  Available at http://www.cac.washing
    ton.edu/admin/hr/benefits/retirement/vip/saver-credit.html.

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