An article appearing in the October 5 issue of Forbes magazine may ring true with many readers, especially those with kids approaching college age.

Entitled “When Work Doesn’t Pay for the Middle Class” by authors Janet Novack and Stephanie Fitch, the article chronicles the story of Judith Lederman, a 50-year old divorcee living in Scarsdale, Westchester County, with her daughter, Casey, a high school senior. Eighteen months after being laid off from her job paying $120,000 per year as a publicity manager, Ms. Lederman is considering jobs paying half that amount.

One reason that Ms. Lederman has decided to lower her economic sights is desperation, but the article explains that the decision makes pretty good economic sense as well. This is because the first $60,000 she earns is lightly taxed, but the next $60,000 (the amount that would enable her to reach the same nominal pay level as before) is effectively taxed at an astounding 79% marginal rate.

How do we get to 79%? The article explains that Ms. Lederman would pay $16,500 more state and federal taxes than she would if she earned $60,000, would not qualify for the five-year $12,000 a year cut in her mortgage payments that she is applying for and also would get $19,000 per year less in need based financial aid when her daughter enters college.

According to the Forbes authors, there are now more than two dozen federal tax breaks (including seven under the recent stimulus bill) that disappear as income rises. For example, just between $60,000 to $90,000 a single parent could lose some or all of the $1,000 child credit, the $2,500 per college student credit, the $400 Making Work Pay credit and (for the moment) the $8,000 first time home buyer credit, as well as deductions for individual retirement accounts and interest paid on a student loan.

As for college tuition, the article explains that need based financial aid often assumes that families devote 47% of after-tax income (above a specified low level) to college charges and that this aid “is a blend of government subsidies and what the traffic will bear.” While some schools go higher, most schools can expect the 47% rate from a family with an income of $65,000 or more.

The article highlights a real problem. Yes, of course, many people would love to earn $120,000 per year, although this is only a middle class family income in the New York metropolitan area. Nevertheless, although a family earning this level (or even twice that amount) cannot reasonably be considered “rich” in many geographic areas, earners are subjected to such a burdensome level of financial obligations that work becomes close to worthless. This is, of course, bad for the family but also bad for the economy, which loses the participation of skilled individuals.

Unfortunately, recent trends seem likely to make this situation worse. While President Obama asserts that taxes will rise for individuals earning $250,000 or higher, the surging deficits in recent years will very likely require that tax increases reach much further down the scale. The President’s proposed cap and trade program will also likely affect every family if it is enacted. And of course, the health care plan is a complete wild card. If, contrary to rosy predictions of the White House, the costs vastly exceed expectations, as they did with Medicare, another big tax increase may be required.

While fairness is one reasonable goal of economic policy, strongly discouraging the Judith Ledermans of the world from fully participating in the workforce makes no economic sense.