While eligibility for public health care programs is often overlooked in effective
marginal tax rate calculations due to the complexity surrounding its inclusion, health
care subsidies comprise a large portion of the social welfare budget. Excluding health
programs severely understates the impact of government policy on increases in net
income as earnings increase. Accordingly, we attempt to provide some measure of the
effect of health programs on the effective marginal tax rates faced by households by
including an average government cost of health insurance. In addition, we briefly discuss
the implications of the exchange subsidies under the Affordable Care Act scheduled
to take effect in 2014.