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Suspicious Discontinuities

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Re: Suspicious Discontinuities

#201

Post by RHSeeger »

SilasX wrote: post #111
peteretep wrote: post #106

Earlier quoted context omitted.

I think you have misread or misunderstood this. Under the old system, it was possible to take a job, and then have less actual income than you did before. Under the new system, _every_ extra hour of work you do causes you to have more money in your pocket, and you are always incentivized to do more work, or start a job that pays less now but might pay more as your experience grows. I'm not sure how else you'd want th…

My point was that 63% is still very bad, and if it’s supposed to be an improvement, then the existing system is abysmal from an incentive perspective.

I have a hard time following this argument. It's not a tax, it's a limit to benefits. If the government comes along and says

> You need $30,000 / year to live at a minimum in our society. We will make sure everyone that makes less than that gets enough in benefits to make up the difference.

That's not a 100% tax rate for any money earned under $30,000 / year. It's reduced benefits because the definitions of the system (the minimum amount needed to survive) indicate the system only needs to make sure everyone is at a specific minimum level.

You can argue that working costs money (transportation, child care, clothing, etc), and that's a valid argument against working if the amount you make would mean you wind up with less money available for other things.

However, it's still not a tax. It's a limitation in the analysis of cost of living requirements. Calling it a tax is disingenuous.

Re: Suspicious Discontinuities

#202

Post by DanBC »

Dylan16807 wrote: post #129
peteretep wrote: post #122

Earlier quoted context omitted.

How else would you see this working, exactly? You've got to make sure people who need the benefits and can't work get supported, you need to not discourage people from working (and most people _do_ want to work), and you also can't just (afford to) unilaterally extend benefits to a whole bunch of people who don't currently get them. So, concrete proposal on how you'd structure this?

The exact same way as the new system, except instead of 63% it's a much smaller number. Edit: Why are people downvoting this? I don't understand what's so confusing about SilasX's argument. Removing cliffs and changing it to a smooth dropoff is good. But that dropoff doesn't have to be £.63 in benefits per £1 earned. That's a pretty big effective marginal tax rate! Why not £.50 or £.30? It should be extremely easy to…

I loathe Universal Credit.

This 63% thing is the replacement for "working tax credits" -- it's a top-up of wages for people on low paid work. People get their wages, and then on top of that they get extra money.

In the past this would have been working tax credits.

The advantages are that claimants do not need to ask for permission before starting work. They can just do the work and then declare it. The disadvantages are that the system can't cope well with zero-hour contracts or self-employment, and this is leaving people in severe financial hardship.

Re: Suspicious Discontinuities

#203

Post by naasking »

chillacy wrote: post #140
taneq wrote: post #127

Earlier quoted context omitted.

> some sort of meritocracy What definition of merit are you using that it's not? > most people don't describe themselves as racist, but a surprisingly high number of people are Calling people racist for preferring to date a particular race is just silly, you might as well call people sexist for preferring to date a particular gender.

It really depends on the reason to prefer to date a particular race. A: If it's aesthetic, sure (though one might ponder to what extent euro-centric beauty standards are indicative of inherent attractiveness vs a desire to fit into the current dominant culture: fair skin is now very popular world-wide, skin lightening is a big thing in Asia, the most popular plastic surgery tends to try to replicate european features…

> This lady could not see that her failure to accept intermarriage negated her claim to genuine liberalism.

No true Scotsman. Also, maybe she didn't want her daughter to suffer the cost of how society treated mixed race couples at the time. That's society's racism on display, not hers. I think we should all just be a little more charitable.

Re: Suspicious Discontinuities

#204

Post by DanBC »

lmm wrote: post #125
crooked-v wrote: post #117

Earlier quoted context omitted.

As the reduction applies only to the benefits (not to your income), it's just a smooth reduction in benefits as you earn more money, not a tax.

Money is fungible. If a salary increase of $1 leaves you with 37c in your pocket that's a de facto 63% marginal tax rate, however it happens to be structured for accounting purposes.

The salary increase of £1 leaves you with £1.37, because you get the £1 wage plus £0.37 benefits.

Re: Suspicious Discontinuities

#205

Post by spockz »

Dylan16807 wrote: post #164
iainmerrick wrote: post #159

Earlier quoted context omitted.

I totally agree, but I just realised -- there’s another cliff edge here! I surveyed opinions on tax brackets a while back, and it seemed like there was a big psychological barrier at the 50% rate. Most high earners would be willing to pay a 50% marginal tax rate (albeit some very grudgingly) but almost nobody was willing to go over 50%. What’s good enough for the rich should do for the poor as well. The benefit drop…

What does 'willing to pay' mean, exactly? Surely they're not turning down a raise out of stubbornness. And pay of that caliber is not often hourly.

They might accept the raise and try to work less hours to keep the total similar. Or it works as an incentive to start finding ways to pay less taxes, out of a notion of fairness.

Re: Suspicious Discontinuities

#206

Post by currymj »

jonnycomputer wrote: post #183
btilly wrote: post #74

The perverse incentives around these discontinuities is one of the worst misfeatures of programs intended to help people. Here is a real example. My niece wound up with 3 kids, divorced, with inconsistent child support payments. So she went on food stamps. She was looking for a better job. She found one, interviewed, and they wanted to hire her. But the salary that they offered was $0.50/hour too much for her to stay…

I agree, and I have my own stories to tell (like my foodstamps admin telling me to spend my tax return as quickly as possible or I'd lose foodstamps; which is doubly perverse). A for tax brackets, why do they exist. I think our mathematics is advanced enough that things like tax brackets could be replaced by continuous functions. So its either by design or by lack of imagination that these discontinuities exist. I've…

at least in the US, income tax brackets are done in a mostly reasonable way. if the tax bracket is at $30,000 and you make $35,000, then you’d pay a low percentage of the first $30k and a higher percentage of the last $5k. so you can’t lose money by earning an extra dollar, at least only considering income tax.

it’s other benefits, tax credits, social programs, etc. that sometimes end up being designed with perverse incentives.

Re: Suspicious Discontinuities

#207

Post by jcranmer »

gwd wrote: post #169
stared wrote: post #36

Ad Polish end of high school exams: quite a few years ago I created an interactive widget to explore it https://github.com/stared/delab-matury . There are a few jokes about the Matural Distribution (Matura is the name of this exam) or the Polish Gaussian. It is the Polish language, which is the most discontinuous. However: - There are quite a few scores for the essay which are subjective (e.g. on the style). - It is…

> It is an official procedure that in the case of results on the edge, the person marking should mark an ambiguous score in the favour of the student. The funny thing about the "almost there" argument is that what it means is the actual line is more fuzzy, but a bit lower. That is, if the "official" cut-of is 30, and teachers are willing to "find an extra point" for people with scores of 28 and 29 but not 27, then th…

When I was a TA, the rule for homework assignments was that they were due at midnight, with a grace period chosen per-assignment of 1 to 6 hours, undisclosed to students. Alas, I could only choose the grace period on 5 minute increments, so I couldn't pick a time like 3:13.

The grace period I set for the hardest homework assignment was 1:05--probably cut off a few people who were hoping to extend a two-week assignment by 3 or 4 hours.

Re: Suspicious Discontinuities

#208

Post by gwd »

jcranmer wrote: post #207
gwd wrote: post #169

Earlier quoted context omitted.

> It is an official procedure that in the case of results on the edge, the person marking should mark an ambiguous score in the favour of the student. The funny thing about the "almost there" argument is that what it means is the actual line is more fuzzy, but a bit lower. That is, if the "official" cut-of is 30, and teachers are willing to "find an extra point" for people with scores of 28 and 29 but not 27, then th…

When I was a TA, the rule for homework assignments was that they were due at midnight, with a grace period chosen per-assignment of 1 to 6 hours, undisclosed to students. Alas, I could only choose the grace period on 5 minute increments, so I couldn't pick a time like 3:13. The grace period I set for the hardest homework assignment was 1:05--probably cut off a few people who were hoping to extend a two-week assignmen…

After reading about human beings' natural tendency to "anchor" on things like the next 100-point ELO rating, that probably a better way of doing things would be to say it was due at midnight, but there was a 10-minute grace period. people naturally will tend to aim for midnight, regardless of whether it's a hard deadline or not.

IOW, my professor's insight that there had to be a hard deadline somewhere was correct. But he missed the fact that not all hard deadlines are equal: a hard deadline that is 10 minutes past a natural "anchor" is much easier for anchor-prone humans to meet than a hard deadline right on a natural "anchor".

Which is a bit strange, because the official university policy with regard to scheduling actually already took into account this natural anchoring: It was official policy that if a schedule said 10:00-11:00, the class was actually 10:10-11:00. The idea being that it's much easer for the "hard end" of a class to be at 11:00 than 10:50.

Re: Suspicious Discontinuities

#209

Post by dreen »

meristem wrote: post #59
lostmsu wrote: post #31

Earlier quoted context omitted.

Why is it depressing? Biologically this must be tuned to the best age for having kids, and men's age hardly matters.

Quality of sperm decays with age. Just not in the same curve as egg reserves.

This wouldnt matter in a natural environment, but our biology hasnt caught up with us not living in such environments anymore.

Re: Suspicious Discontinuities

#210

Post by rtkwe »

jonnycomputer wrote: post #183
btilly wrote: post #74

The perverse incentives around these discontinuities is one of the worst misfeatures of programs intended to help people. Here is a real example. My niece wound up with 3 kids, divorced, with inconsistent child support payments. So she went on food stamps. She was looking for a better job. She found one, interviewed, and they wanted to hire her. But the salary that they offered was $0.50/hour too much for her to stay…

I agree, and I have my own stories to tell (like my foodstamps admin telling me to spend my tax return as quickly as possible or I'd lose foodstamps; which is doubly perverse). A for tax brackets, why do they exist. I think our mathematics is advanced enough that things like tax brackets could be replaced by continuous functions. So its either by design or by lack of imagination that these discontinuities exist. I've…

Making them continuous means requiring everyone to use a computer to calculate simple things like income taxes. Brackets aren't even a case of perverse discontinuities because the higher tax rate only applies to the money made in that bracket. Looking at just income taxes you never take home less money from getting paid more, it's a quite reasonable balance between computational simplicity and a rational progressive tax structure.
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