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Effects of Reform Scenarios F. Conclusions FIGURES 1. Income Levels and Income Inequality 2. Guaranteed Minimum Income 3. Tax Rates Comparisons 4. Potential Income Distributions, 2018 5. Disposable Income Decomposition 6. Marginal Effective Tax Rate Composition 7. Participation Tax Rate Decomposition 8. Estimated Social Marginal Welfare Weights 9. Social Marginal Welfare Weights for Reform 10. Participation Tax Rates 11. Marginal Effective Tax Rates 12. Labor Supply Responses, Combination Reform 13. Net Income Changes from Reform 14
participation decision. Even for individuals earning 50,000 euros—well beyond the phase-out range of the benefits—the two programs still increase PTRs by 20 percent ( Figure 7 ). At the very bottom, childcare costs add 40 percent to the PTR and push it up above 100 percent as earnings approach zero (not shown in the chart). Similar to the METR, the in-work credit makes work more attractive along the extensive margin by reducing the PTR by up to 13 percent for low-wage and part-time workers. Figure 7. Participation Tax Rate Decomposition (Percent, 2018) 13