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Suspicious Discontinuities

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Re: Suspicious Discontinuities

#251

Post by daniel-thompson »

vxNsr wrote: post #213
mgraczyk wrote: post #88

I have firsthand experience of the frustration that these sort of discontinuities can cause. I lost all financial aid and nearly all "scholarship" money my senior year of undergrad after my 6 month coop at Intel put me over some income limits (probably around $33k per year). All told, I was probably ~$5k ahead compared to where I would have been with the scholarships and without the income. Still, it would have been…

Presumably the experience itself helped you get other jobs that would’ve been unattainable had you not had a prestigious internship at intel.

Sure, but the person would have been in the same boat no matter what specific logo was hanging over the door.

Re: Suspicious Discontinuities

#252

Post by btilly »

dTal wrote: post #174
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…

>the salary that they offered was $0.50/hour too much for her to stay on food stamps, and was less than her current job I don't understand. How was she eligible for food stamps, if she already had a job that paid more ?

I meant that her total compensation was more with her current job that paid less and did not use her qualifications.

The equation was worse job + food stamps > better job without food stamps. The better job in the long run might have lead to better still. But she couldn't afford it in the short run.

Re: Suspicious Discontinuities

#253

Post by PaulHoule »

jchrisa wrote: post #243
PaulHoule wrote: post #225

Earlier quoted context omitted.

I dunno, wasn't it Milton Friedman who was promoting UBI during the Nixon administration? I've got this funny feeling that Congress likes legalistic solutions to problems because they are mostly lawyers. (All lawyers when it comes to Democrats) The pain of filling out paperwork for means testing seems less painful to them than it does to the general population. The 'swiss cheese' approach to social services is one of…

Maybe you are good at paperwork, but it’s worth remembering that even Google sometimes biffs a domain name renewal. Why put artificial hurdles in front of people who need help?

If you want to remove those hurdles you might want to see some more diversity (e.g. not lawyers) in Congress.

Re: Suspicious Discontinuities

#254

Post by mech1234 »

thu2111 wrote: post #233
smnrchrds wrote: post #217

Earlier quoted context omitted.

I reminds me of that quip that if libraries didn't exist already and did not have a history millennia long, no government would create one today. Instead, they would create a means-tested tax credit for purchasing books.

Intriguing idea :) I'm not sure if you're speaking approving or not (or neither). It seems like a reasonable thing to do though. Amazon is bigger than any library, it avoids the use of physical space in city centres and the need to manage loan systems/handle stolen books. I think the difference between then and now is that IT happened, so it's much easier to do things like calculate complex per-item tax rates than it…

I'm getting strange vibes for how people must be reacting to this.

Your idea of a possible better world is so bad that you should feel bad! /s

Re: Suspicious Discontinuities

#255

Post by ahakki »

raviolo wrote: post #62

Would creating, say, online marketplace to help people lose desired amount of money with certainty - for example, via some sort of specially crafted financial instrument - violate any applicable rules & regs? Idea for the next YC batch?

Charitable contributions can be deducted from taxable income in a lot of places.

Re: Suspicious Discontinuities

#256

Post by mech1234 »

kazagistar wrote: post #215
iainmerrick wrote: post #185

Earlier quoted context omitted.

This was in the context of a political discussion about what the tax bands should be, not about paying the current taxes in reality. Some people want higher taxes and some want lower; what I’m saying is, 50% stood out as an arbitrary threshold that many people seemed possibly willing to agree on. Some complained that rich people shouldn’t be expected to prop up the rest of society, but conceded that progressive tax b…

Tax rates dont pay for services, they pay for preventing inflation. The government printing money pays for services.

You are being needlessly contrarian.

Fiscal policy comprises both borrowing and taxing; the two are fungible as far as spending is concerned.

Re: Suspicious Discontinuities

#257

Post by SilasX »

RHSeeger wrote: post #201
SilasX wrote: post #111

Earlier quoted context omitted.

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 syste…

Then remove the word “tax” from my point and rephrase it as “only capturing (less than) 37% of the wage”, and every relevant point still applies. If you still don’t see the significance, I can only blame underpractice at the skill of abstraction.

(I mean, if you don’t like the framing, fine, but you specifically said you have a “hard time following” the argument.)

Re: Suspicious Discontinuities

#258

Post by DanBC »

DanBC wrote: post #204
lmm wrote: post #125

Earlier quoted context omitted.

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.

I don't understand how this got downvoted, because it's literally what happens.

Universal credit replaces a wide range of legacy benefits. One of the legacy benefits it replaces is "working tax credits". These were payments made to people who were working and on a low income.

This part of Universal Credit "tops up" your earnings from work. They are in addition to your earnings. is.

When someone on UC starts working they get their pay from work, and on top of that they get their their universal credit minus 63 pence per pound that they earn from work.

In the past if you did more than 16 hours of work in a week all your benefit would stop, but under UC you can work over 16 hours in a week and keep the money.

Universal Credit work allowances: https://www.gov.uk/government/publications/universal-credit-...

What the earnings taper is and how this affects Universal Credit: https://www.entitledto.co.uk/help/Earnings-taper-Universal-C...

How your earnings affect payments: https://www.gov.uk/universal-credit/how-your-earnings-affect...

Re: Suspicious Discontinuities

#259

Post by dllthomas »

jonnycomputer wrote: post #186
glogla wrote: post #167

Earlier quoted context omitted.

I disagree strongly with your idea of "poor people would just spend on drugs" but there's a nugget of reason in it - there's a high risk that UBI without rent control would just be subsidizing the landlords, without actually helping the people.

For the most part people know best where there money needs to go; most of the financial advice people see from "experts" really is oriented toward people who have money left over after paying for necessities. As for housing, I think that this would be standard econ, really. More money means more demand, which in the absence of more supply, means higher prices. Things like housing are harder to increase the supply of…

One thing worth noting is that UBI actually has an impact on supply,.

What people want to purchase is not simply housing - it's housing in their preferred location.

I think a big part of what makes housing desirable, for the bulk of the population, is ability to earn enough of an income nearby. If that's the case, UBI might actually directly create desirable housing (out of almost desirable housing) and increase supply.

I don't expect this effect would be large enough that UBI would put downward pressure on housing prices overall, but I don't really know.

Re: Suspicious Discontinuities

#260

Post by thu2111 »

mech1234 wrote: post #254
thu2111 wrote: post #233

Earlier quoted context omitted.

Intriguing idea :) I'm not sure if you're speaking approving or not (or neither). It seems like a reasonable thing to do though. Amazon is bigger than any library, it avoids the use of physical space in city centres and the need to manage loan systems/handle stolen books. I think the difference between then and now is that IT happened, so it's much easier to do things like calculate complex per-item tax rates than it…

I'm getting strange vibes for how people must be reacting to this. Your idea of a possible better world is so bad that you should feel bad! /s

Haha yeah -4, that's pretty far out. Lots of people who hate tax credits out there!

It's really hard to defend libraries though. They're not just an inefficient use of space. They're bad for the environment too, as people have to travel back and forth all the time to swap books, discover the book they want isn't returned yet, etc. They're often badly maintained. Their books get damaged, lost or stolen. Their selection is really, really limited.

Buying a book online is a great replacement except for the buying part. For most people books aren't a big part of their expenditure. For people for whom it is it'd be reasonable to effectively give them the money back instead. Especially now the marginal cost of the "book" is near zero, like with software. If the admin systems were good enough you'd never have to think about it: it could be integrated with the booksellers checkout system so the cost is literally zero. Of course that's not how tax credits really work today, but it could be done that way.

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