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Suspicious discontinuities (2020)

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Re: Suspicious discontinuities (2020)

#251

Post by AnthonyMouse »

eru wrote: post #225
AnthonyMouse wrote: post #215

Earlier quoted context omitted.

The cost is fiction because it's a tax credit. The money is on both sides of the ledger. If you're making $60,000/year and your pre-credit taxes go up by $12,000 and then you get a $12,000 tax credit, you have paid an additional zero dollars in taxes. If you don't make much money and the government used to pay you a net $10,000 in benefits and now you get a $12,000 UBI and pay $2000 in taxes, that hasn't actually cos…

> The cost is fiction because it's a tax credit. The money is on both sides of the ledger. If you're making $60,000/year and your pre-credit taxes go up by $12,000 and then you get a $12,000 tax credit, you have paid an additional zero dollars in taxes. Yes, but marginal rates are important, too.

> Yes, but marginal rates are important, too.

Which is exactly the point. What's the "marginal tax rate" on low and middle income people of the existing benefits phase outs?

The >100% marginal rates that create actual cliffs are so patently absurd that no one can look at them and find any way to justify it, but even when the combined tax+phase out rates are in the neighborhood of 80-90% of marginal income, that's still not what we want, is it?

Re: Suspicious discontinuities (2020)

#252

Post by creer »

dragonwriter wrote: post #193
galdosdi wrote: post #191

Earlier quoted context omitted.

I would consider just taking the medicaid for a year. Medicaid can actually be very good quality healthcare, if you're located say, near a very good research hospital in a city with a structural oversupply of medical care due to having a lot of med schools. I'd rather have medicaid living next to a high quality (non profit) health system, than "nice" insurance living in a shithole. All the insurance in the world can'…

> I would consider just taking the Medicaid for a year. ACA subsidy eligibility may be annual, but Medicaid eligibility is based on current monthly income, and if you have a change that makes you ineligible, you lose it. You can’t just decide to “take Medicaid for a year” because you aren’t subsidy-eligible based on prior-year income.

ACA subsidy eligibility is not annual. "Income changed" is a qualifying event.

Re: Suspicious discontinuities (2020)

#253

Post by creer »

callalex wrote: post #107
baggy_trough wrote: post #80

Earlier quoted context omitted.

It all comes back to the fact that government is a low accountability sector, despite what many people seem to think.

What is the point of saying something like this? Would you prefer that people just not bother to do anything and let poor people starve to death instead?

That won't change until there is wide enough demand to change it. Broad recognition will come long before the changes.

Re: Suspicious discontinuities (2020)

#254

Post by creer »

mrandish wrote: post #89

Coding hard cut-offs like this into legislation, regulation or policies seems crazy almost to the point of negligence, incompetence or malice. Especially when it's so obvious such cliffs will incentivize behavior certain to cause negative or perverse outcomes. It's even more incomprehensible when implementing graduated thresholds is so well understood. A related common failure mode is baking in fixed, absolute thresh…

How can it be blamed to negligence? It's not like these disincentives and dangerous gotchas are not obvious when these rules are written?

Re: Suspicious discontinuities (2020)

#255

Post by AnthonyMouse »

advael wrote: post #249
gottorf wrote: post #233

Earlier quoted context omitted.

> you could make considerably more "tax revenue" by funding the IRS The US government expenditure as percentage of GDP is now over one-third, as opposed to the pre-WW1 long-term average in the single digits. Keep in mind that massive infrastructure projects like the Transcontinental Railroad were able to be built in those single-digit percent times, or that US educational spending per pupil has been going up year aft…

I attribute a lot of the higher expenditure and lower efficiency to the continued insistence that outsourcing to contractors, effectively picking winners in a "market" to give monopoly status, is a better way to provide government services. These firms have little if any accountability to the electorate, no incentive to set reasonable prices, get anything done efficiently, and in some cases don't even produce working…

> outsourcing to contractors, effectively picking winners in a "market" to give monopoly status

In principle this is supposed to be a competitive bidding process, and then the winner is chosen by the most competitive bid rather than the government. In practice the process is corrupt and regulatory barriers are created to prevent smaller companies from submitting bids or project requirements are set such that only one company can satisfy them.

The problem here is corruption, which has nothing to do with whether the corrupting entity is a corporation. Public sector unions lobby for the same kind of labor-inefficient practices because they know that more jobs give them more members which give them more power, even (or especially) when the jobs are unnecessary or inefficient.

The advantage that existed pre-WWII is that neither large government contractors nor large public sector unions already existed in order to lobby for corrupt practices and their continued existence, so the government could just pay someone to do work and then have them to return to the private sector when the work is done. But WWII created such a large apparatus dependent on taxpayer revenue that it had enough lobbying power to sustain its continued existence, and now it needs to be disassembled before we can have nice things again.

But probably the best way to do it is under anti-corruption. You still want roads and ships to be built, but if you could get the corruption out of the bidding process then they'd be built by smaller and less consolidated companies with less individual lobbying power, and then you could address efficiency issues without having to fight a multi-billion dollar corporation or huge public sector union because that inefficiency is their profit margin/job. Another possibility would be anti-trust -- break the big government contractors up.

Re: Suspicious discontinuities (2020)

#256

Post by creer »

stephenbez wrote: post #234
qazwsxedchac wrote: post #133

Marginal rate discontinuities in the UK income tax system [0] are driving highly undesirable (from the taxman's point of view) behaviour. The increase in marginal tax rate from £100K p.a. upwards has already led to: - doctors going part-time to keep their income below £100K, in the middle of a shortage of doctors across the health system - employees turning down promotions because with the combined effects of income…

If I understand the linked chart, there are discontinuities in the marginal tax rate, not the effective tax rate. So in that case yeah at certain levels the amount you owe on each additional dollar goes up, but that would not mean that making 105k is worse than 100k unless the marginal tax rate is greater than 100%. This ignores stuff like losing childcare subsidies that is likely not included on the graph. In the us…

> there are discontinuities in the marginal tax rate, not the effective tax rate

This is often claimed. And the whole point of the article and much of this discussion is that no, there are often major steps / discontinuities in the overall tax rate. In the US, the many ACA discontinuities just by themselves are large and do not effectively pay attention to the bottom line. For that matter, I don't know of a single country or US state that actually "runs on effective tax rate". Which might be a solution to the problem if anyone were actually looking for a solution to the problem.

Re: Suspicious discontinuities (2020)

#257

Post by advael »

AnthonyMouse wrote: post #255
advael wrote: post #249

Earlier quoted context omitted.

I attribute a lot of the higher expenditure and lower efficiency to the continued insistence that outsourcing to contractors, effectively picking winners in a "market" to give monopoly status, is a better way to provide government services. These firms have little if any accountability to the electorate, no incentive to set reasonable prices, get anything done efficiently, and in some cases don't even produce working…

> outsourcing to contractors, effectively picking winners in a "market" to give monopoly status In principle this is supposed to be a competitive bidding process, and then the winner is chosen by the most competitive bid rather than the government. In practice the process is corrupt and regulatory barriers are created to prevent smaller companies from submitting bids or project requirements are set such that only one…

No, the problem would exist even if the bidding process was completely fair, because it still creates a situation where a long-standing project creates stable returns for a company while decoupling the service it provides from both market forces and public accountability. It is the worst of both worlds: shielded from market forces by having its customer be the government, providing a government service shielded from public accountability by the corporate veil

Yes, we should reduce corruption and break up existing entrenched players, but the core issue is in the structure of that kind of arrangement. I do also think that there's no good reason to have a "corporate veil" in the first place, but that's a broader problem

Re: Suspicious discontinuities (2020)

#258

Post by AnthonyMouse »

advael wrote: post #257
AnthonyMouse wrote: post #255

Earlier quoted context omitted.

> outsourcing to contractors, effectively picking winners in a "market" to give monopoly status In principle this is supposed to be a competitive bidding process, and then the winner is chosen by the most competitive bid rather than the government. In practice the process is corrupt and regulatory barriers are created to prevent smaller companies from submitting bids or project requirements are set such that only one…

No, the problem would exist even if the bidding process was completely fair, because it still creates a situation where a long-standing project creates stable returns for a company while decoupling the service it provides from both market forces and public accountability. It is the worst of both worlds: shielded from market forces by having its customer be the government, providing a government service shielded from…

> it still creates a situation where a long-standing project creates stable returns for a company while decoupling the service it provides from both market forces and public accountability.

But that's just a mechanism for the corruption. The contract for the design of something and its manufacture and maintenance should each be separate bids. Even each stage of the design should be a separate contract that could go to someone else. The government says "we need a design for a ship" and they put it out to firms who submit their proposals and then the government picks one and buys it outright. Then they say "we need a design for a propulsion system for this ship" and take bids again. If you need to modify the ship's design some to facilitate it, that's fine, because none have been built yet and the necessary change gets incorporated into the design before you put out contracts to build any of it.

What you want is for each of the contracts to be as small as practicable, to maximize the number of potential bidders. None of this "single contract to design and build an entire fleet of ships and maintain them for 30 years" nonsense.

Re: Suspicious discontinuities (2020)

#259

Post by korhojoa »

IIAOPSW wrote: post #217
JohnMakin wrote: post #18

I went to school at a relatively late age and started in community college. The school/state had a policy where any independent income earners making less than 35,000/year would not pay tuition. A single dollar over that would require paying full tuition of ~$60/unit or about $750 a semester. One year I worked a little more overtime during the holidays than usual and realized with a week to go in the year that I'd go…

>I have never understood why things like this don't use some sort of sliding scale, rather than absolute dividing line. Try translating your idea of a sliding scale into a piece of legislation which matches your intention.

The usual solution is something like: for x units of excess past the set limit, remove y unit of subsidy/support.

Example: something costs 20 money, if you earn 100 money or below, then it is subsidized to cost only 10, where 10 money is a subsidy. For every 2 money you gain, 1 money in subsidy is removed.

If you earn 104 money, it will now cost 12.

The x and y values vary depending on what kind of things are subsidized, but this is a fairly simple way of doing it that doesn't punish you harshly for a small difference in earnings.

Re: Suspicious discontinuities (2020)

#260

Post by advael »

AnthonyMouse wrote: post #258
advael wrote: post #257

Earlier quoted context omitted.

No, the problem would exist even if the bidding process was completely fair, because it still creates a situation where a long-standing project creates stable returns for a company while decoupling the service it provides from both market forces and public accountability. It is the worst of both worlds: shielded from market forces by having its customer be the government, providing a government service shielded from…

> it still creates a situation where a long-standing project creates stable returns for a company while decoupling the service it provides from both market forces and public accountability. But that's just a mechanism for the corruption. The contract for the design of something and its manufacture and maintenance should each be separate bids. Even each stage of the design should be a separate contract that could go t…

Yea, that does seem like a reasonable way to design less corrupt mechanisms for these processes, but I think the standard way piecemeal designs like that get rejected is by arguments to "efficiency" (Nevermind that efficiencies gained by bundling require some pretty strict discipline within a firm, mostly benefit the firm, and are easily dwarfed from the government's perspective by the inefficiencies taken on by the problem we're talking about)
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