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Suspicious discontinuities (2020)

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Re: Suspicious discontinuities (2020)

#271

Post by rhelz »

philomath_mn wrote: post #244
rhelz wrote: post #140

Earlier quoted context omitted.

> It is a net good for the economy [for individuals to improve their lives] I agree. If you've just inherited $25 million, it would still be better for you and for society for you to get a job--even a job paying $50k a year if that is all you could get. But...are you going to be incentivized to do so? If you care about somebody not wanting to make $50k because they'd lose a $10k subsidy, how much MORE should you care…

- The government created an incentive structure keeping people on government benefits from being productive members of the economy. It should fix that. - There is still a question of scale: the trust-fund-baby population is several orders of magnitude smaller than the makes-50k population > I advocate a 100% inheritance tax Well then I don't think there is much common ground between us :) A 100% inheritance tax sever…

> A 100% inheritance tax severely dis-incentivizes savings

Sure, but how much value have we lost because talented kids didn't get the education they needed? How much are we being harmed right now because a mediocre, but wealthy person is holding an office which could be better done by somebody who was excluded through no fault of their own//

Re: Suspicious discontinuities (2020)

#272

Post by lupire »

hackerlight wrote: post #176
orangecat wrote: post #106

Earlier quoted context omitted.

Right, and this is one of the reasons why I support a UBI that replaces most existing welfare programs. Amazingly some people criticize UBI on the grounds that it removes the incentive to work, when it's almost exactly the opposite.

Is UBI the same as a negative income tax that Milton Friedman advocated for?

Negative income tax is the Earned Income Tax Credit, paying a subsidy for earning income.

Re: Suspicious discontinuities (2020)

#273

Post by [deleted] »

heavenlyblue wrote: post #139
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…

But these tax rates are all under the current government, why would single high earners vote for it?

[deleted]

Re: Suspicious discontinuities (2020)

#274

Post by physicsguy »

We have some of these in the UK tax system, some of which are being resolved (or at least improved) but many which aren't.

Currently, if you have a child, you're entitled to a cash payment called child benefit. For a first child it's worth £26 per week and then any subsequent children you'd get £15.90 per week. However, you only get this if the highest earner's income is below £50,000. Between £50k and £60k, it's on a sliding scale, so at £55k you get 50%, £57.5k you get 25%, etc.

Side effects of this are that if you have two earners both on £49999, you get the full amount, and one earner on £60000 you get nothing. It means there's a crazily high effective marginal rate on people. If you put money into your pension, it can bring you down below the threshold again, so many people (if they can afford to) will do this.

From next month, they're changing the threshold to £60-80k over which it drops off, which is a big improvement, but the marginal tax rate effect is still there.

Re: Suspicious discontinuities (2020)

#275

Post by specialist »

advael wrote: post #214
Aerroon wrote: post #205

Earlier quoted context omitted.

The problem with UBI isn't so much the politics, it's the feasibility of the cost. $12k a year over 300 million people is 80% of the US government's tax revenue. A negative income tax might work out a lot better on the numbers, but it won't help the people that need it the most (the ones that can't get a job). But hey, maybe it can work. The US has a deficit spending of $1.7 trillion in 2023, $1.4 in 2022, $2.7 in 20…

This is nonsensical for numerous reasons 1. The federal government doesn't have tax revenue. It issues a currency and then taxes go toward countering inflation. The notion that a currency-issuing government needs to "balance its budget" in its own currency is a political fiction. Also, policies that benefit people at the lower end of the income spectrum disproportionately actually move money around in the economy, wh…

> fund drug research only to then allow the resulting breakthroughs to be patented by a private firm

Governments should be paid royalties for the patents (and other IP) they issue and protect.

For IP subsidized with public money, maybe auction off those rights.

Re: Suspicious discontinuities (2020)

#276

Post by [deleted] »

sircastor wrote: post #177
duxup wrote: post #95

Earlier quoted context omitted.

I changed career paths post age 40 via a coding bootcamp. Despite being a terrible student when I was younger, I found had a great time learning, and I've really enjoyed my job ever since. I found myself in a strange position though, lots of services offered benefits to students, discounts, internships, storage / compute time etc. I was not enrolled in a traditional university (although they were administering it), a…

I finished my bachelors degree after I turned 40. I was a much better student than I’d been in my 20s or teens. My wife is friendly pursuing her bachelor’s and it is clear to both of us that universities are really just tolerant of non-traditional students. You won’t be treated poorly, but all of the infrastructure, tools, class progression, etc, is constructed around post-Highschool young adults. It’s been a while s…

[deleted]

Re: Suspicious discontinuities (2020)

#277

Post by sanderjd »

duxup wrote: post #230
sircastor wrote: post #177

Earlier quoted context omitted.

I finished my bachelors degree after I turned 40. I was a much better student than I’d been in my 20s or teens. My wife is friendly pursuing her bachelor’s and it is clear to both of us that universities are really just tolerant of non-traditional students. You won’t be treated poorly, but all of the infrastructure, tools, class progression, etc, is constructed around post-Highschool young adults. It’s been a while s…

I agree, there's a weird culture barrier almost at times. My wife was in grad school and pregnant. Some of the instructors seemed completely confused on how to handle things. Others seemed to handle it in stride. It's like there's an expectation that "you're relatively poor, young" and some other expectations that when that's not the case the system starts to fall apart.

Yep, my wife did a masters degree in a program "for professionals", which was very clearly designed around people between the ages of 22 and 25, with empty evenings and weekends and definitely no children :)

Re: Suspicious discontinuities (2020)

#278

Post by throwway120385 »

AnthonyMouse wrote: post #134
autoexec wrote: post #50

Earlier quoted context omitted.

The ones I've known with kids all seem to have it far worse. If they were getting a $16k tax credit or whatever it must not have been making up for the other costs involved with raising children.

> The ones I've known with kids all seem to have it far worse. If they were getting a $16k tax credit or whatever it must not have been making up for the other costs involved with raising children. Worse than someone who doesn't have to pay raise a kid isn't the same thing as worse than someone else with kids who makes $8000 more and therefore loses the $16,000 credit. And the cliffs are only half the problem. Did yo…

> You also get a housing subsidy, but only for particular housing, which isn't as close to your job or doesn't allow you to pool resources with roommates, so now you have to pay more for transportation or most of the subsidy gets eaten by higher rents etc.

Yeah the subsidies also will not cover the entire cost of housing. So you probably have to drive a lot farther than someone else who is not using welfare to pay for the same kind of housing.

A lot of welfare stuff looks like a great deal when you put an amount on it but completely falls apart when you look at how challenging it is to access and what the conditions are around continuing in the program. It gets to the degree that getting that extra $40-50k a year requires you to give up a LOT. And it's a full time job to maintain. So you have to do all of that on top of your full time job, often with agencies who have no hours after work. And god help you if you have to show up somewhere regularly to pick something up.

As a bonus nuking welfare and replacing it with UBI would help a lot of the chronically homeless because it would allow them to get assistance without needing to have a permanent physical address.

Re: Suspicious discontinuities (2020)

#279

Post by AnthonyMouse »

throwway120385 wrote: post #278
AnthonyMouse wrote: post #134

Earlier quoted context omitted.

> The ones I've known with kids all seem to have it far worse. If they were getting a $16k tax credit or whatever it must not have been making up for the other costs involved with raising children. Worse than someone who doesn't have to pay raise a kid isn't the same thing as worse than someone else with kids who makes $8000 more and therefore loses the $16,000 credit. And the cliffs are only half the problem. Did yo…

> You also get a housing subsidy, but only for particular housing, which isn't as close to your job or doesn't allow you to pool resources with roommates, so now you have to pay more for transportation or most of the subsidy gets eaten by higher rents etc. Yeah the subsidies also will not cover the entire cost of housing. So you probably have to drive a lot farther than someone else who is not using welfare to pay fo…

> It gets to the degree that getting that extra $40-50k a year requires you to give up a LOT.

And it's still costing the taxpayer ~$45k -- more than that, because the government has its own administrative overhead on top of that.

But people still use it, because they're doing $30k in work to get $45k in benefits, it's just that they were supposed to be getting $45k in benefits. Which the taxpayer is still paying for even though the net benefit is far less.

The people asking how to pay for it haven't understood the math. If you subtract both the government's administrative overhead and the recipient's, we could provide a higher level of true benefits to people and still lower taxes on everyone else, just by splitting the efficiency gains between them.

Re: Suspicious discontinuities (2020)

#280

Post by ukoki »

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…

Decreasing marginal rate thresholds on UK income tax (like going from 60% at 125,139 to 40% at 125,140) is insane and leads to wacky optimisations like the following:

Suppose you predicably earn 150k a year. Taking 110k per year salary and putting 40k in your pension for four years results in less net income than:

* Taking 140k salary and 10k pension in year one

* Take 100k salary and 50k pension in years two, three, and four

In both cases you have taken 440k salary and put 160k in your pension. But in the first case you have paid highest tax rate of 60% tax rate on 40k and in the second case you paid the highest tax rate of 60% on only 12,570.

Since the annual pension allowance is now 60k per year, and you have a three year carry-forward to use unused pension allowance from previous years you can do this trick with quite a wide range of gross salaries. And you can use it for the 125,139 to 125,140 decreasing marginal rate, or the 59,999 to 60,000 decreasing marginal rate due loss of child benefit.

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