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Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

nytimes.com

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Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#61

Post by dahdum »

Kalium wrote: post #12
lalos wrote: post #10

Earlier quoted context omitted.

How would you structure that bonus if you get a promotion that takes you to 7,501? You would get an impressive pay cut. If you structure it like taxes where only the first 7.5k get doubled then a bunch of people that don't need it will also get free money making the program cost more.

You're right! That would be a major concern and an incredibly serious flaw in such a program. Maybe the description could be parsed slightly differently? Some might read parent's description to be proposing a bonus on W2 income the a limit on the bonus only of $7,500. Thus an income greater than that receives the full bonus. The structural problem you have correctly identified thus does not arise!

You’re right, that’s what I meant but said poorly. It’s a bonus on the first $7,500, not a tax credit. If you only make $10k / yr you aren’t paying any taxes anyway.

If you’re making 500k, the income bracket increase used to fund the program would cost far more than the gain you received, but realistically it probably would be written to phase out for pure optics.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#62

Post by dahdum »

Kalium wrote: post #59
PurpleBoxDragon wrote: post #35

Earlier quoted context omitted.

So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? It would make sense to assume there is some cut off, and given how government cut offs work in the past, it would be reasonable to assume the cut off will be implemented in a fashion that creates a graph where sometimes raises will result in less pay, at least when combined with existing govern…

> So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? Depends how it's implemented, probably. People react differently to larger paychecks and tax refunds, for example. And certainly people react differently if you call it a bonus, even if it is just a negative income tax that would please Friedman. > It would make sense to assume there is some…

I should clarify too the bonus should be paid along side W2 earnings as steadily as possible, not at the end of the year. End of year refunds / cash don’t help pay rent and groceries in June.

The graph need not ever result in less pay, but Your rate per hour would decrease after the cap is earned out.

Somewhat harebrained perhaps, I like Friedman’s negative income tax but also want to encourage both employment and small business growth.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#63

Post by DuskStar »

eaandkw wrote: post #38
marme wrote: post #22

Earlier quoted context omitted.

That is not how any market works. Just because your customers have more money does not change the supply or demand for your product. A luxury apartment fetches a high price because there is demand from tenants willing to pay the luxury price. No one is going to pay more for the same apartment unless there is more demand for apartments than there is supply like you have in NYC and SF. More income causes prices to rise…

You should see how the rent goes up in military towns every time our BAH goes up. If everyone knows the tenants are receiving more money the general price for rents will tend to go up. This might be the unintended consequences of a wage/ price spiral.

If I remember correctly, there's no benefit to the soldier involved if they choose an apartment that only costs half of the Basic Allowance for Housing - they don't get to keep the surplus.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#64

Post by ddingus »

pmiller2 wrote: post #48
ddingus wrote: post #39

Earlier quoted context omitted.

Public Works, using the post office as a model. We really do need to be building a lot of stuff, and or fixing stuff we have already done. That work is a direct stimulus, can pay pretty well, and benefits everyone public and private alike. Additionally, the returns from it can pay down all of the expensive bombs and non returned items that we currently spend or have spent on. An example is the interstate highway proj…

Are you saying that every $1 spent on UBI is expected to return $X > 1 and that $X > $Y (where $Y is the return on current social service programs)? If so, I would say [citation needed], but, if proven, that would be a great argument for UBI.

I don't think UBI delivers much of a return at all, when compared to public works and more direct investment in the people.

I do not mean the current social service programs. I mean new, improved ones, along with Public Works people building things of real value that will deliver real returns for very long periods of time.

A very large UBI could. But there's no way that's ever going to happen.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#66

Post by eaandkw »

DuskStar wrote: post #63
eaandkw wrote: post #38

Earlier quoted context omitted.

You should see how the rent goes up in military towns every time our BAH goes up. If everyone knows the tenants are receiving more money the general price for rents will tend to go up. This might be the unintended consequences of a wage/ price spiral.

If I remember correctly, there's no benefit to the soldier involved if they choose an apartment that only costs half of the Basic Allowance for Housing - they don't get to keep the surplus.

No, they get to keep any left over money...if there is any. One way owners can somewhat control who can rent property is by raising the rent to the point that it is unaffordable to junior enlisted servicemen.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#67

Post by PurpleBoxDragon »

Kalium wrote: post #59
PurpleBoxDragon wrote: post #35

Earlier quoted context omitted.

So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? It would make sense to assume there is some cut off, and given how government cut offs work in the past, it would be reasonable to assume the cut off will be implemented in a fashion that creates a graph where sometimes raises will result in less pay, at least when combined with existing govern…

> So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? Depends how it's implemented, probably. People react differently to larger paychecks and tax refunds, for example. And certainly people react differently if you call it a bonus, even if it is just a negative income tax that would please Friedman. > It would make sense to assume there is some…

>It might be a slightly less reasonable comment on the details as written of the proposition above.

The more I think about it, the harder I think it is to create a program which doesn't result in this once combined with other programs. Any cutback, no matter how small, will be combined with all other cutbacks of all other programs, existing and future. As long as these benefits are independent, there is a that the sum of all the cutbacks will outweigh the raise that caused the cutbacks. Even if the max cutback was 10%, meaning it would take a 75k raise to remove all benefits, when combined with 9 other equally generous benefit programs and income tax you still end up with a loss.

When adjusting for the phase out being for optics limiting how the phase out works (as all phase outs for optics would tend to look similar to meet similar expectations), the risk of a raise resulting in lost total income isn't easily dismissed.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#68

Post by Kalium »

PurpleBoxDragon wrote: post #67
Kalium wrote: post #59

Earlier quoted context omitted.

> So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? Depends how it's implemented, probably. People react differently to larger paychecks and tax refunds, for example. And certainly people react differently if you call it a bonus, even if it is just a negative income tax that would please Friedman. > It would make sense to assume there is some…

>It might be a slightly less reasonable comment on the details as written of the proposition above. The more I think about it, the harder I think it is to create a program which doesn't result in this once combined with other programs. Any cutback, no matter how small, will be combined with all other cutbacks of all other programs, existing and future. As long as these benefits are independent, there is a that the su…

You're right! That's a very real risk that should not be readily dismissed.

This is why a program that at no point has any way, shape, form, or manner of phase-out is desirable. It fully and completely avoids any kind of problem stemming from colliding cutbacks. This is such a good idea and so wise, that it was baked in to the approach proposed above!

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#69

Post by PurpleBoxDragon »

Kalium wrote: post #68
PurpleBoxDragon wrote: post #67

Earlier quoted context omitted.

>It might be a slightly less reasonable comment on the details as written of the proposition above. The more I think about it, the harder I think it is to create a program which doesn't result in this once combined with other programs. Any cutback, no matter how small, will be combined with all other cutbacks of all other programs, existing and future. As long as these benefits are independent, there is a that the su…

You're right! That's a very real risk that should not be readily dismissed. This is why a program that at no point has any way, shape, form, or manner of phase-out is desirable. It fully and completely avoids any kind of problem stemming from colliding cutbacks. This is such a good idea and so wise, that it was baked in to the approach proposed above!

In a sibling comment chain the one who purposed the idea mentioned that a phase out might be needed for optics.

But if it doesn't ever phase out, it is really just a tax cut, and to be exact a tax cut. I'll take having to pay 7.5k less taxes (or getting an untaxed check for 7.5k from the same people I have to write my tax check to).

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#70

Post by Kalium »

PurpleBoxDragon wrote: post #69
Kalium wrote: post #68

Earlier quoted context omitted.

You're right! That's a very real risk that should not be readily dismissed. This is why a program that at no point has any way, shape, form, or manner of phase-out is desirable. It fully and completely avoids any kind of problem stemming from colliding cutbacks. This is such a good idea and so wise, that it was baked in to the approach proposed above!

In a sibling comment chain the one who purposed the idea mentioned that a phase out might be needed for optics. But if it doesn't ever phase out, it is really just a tax cut, and to be exact a tax cut. I'll take having to pay 7.5k less taxes (or getting an untaxed check for 7.5k from the same people I have to write my tax check to).

You're absolutely right. It really is just a tax cut.

However, what you call something and how you structure impacts how people react to it. Call it wages and spread it over time and people react one way. Call it a bonus and hand it out once a year and people behave differently. So while it may be more correct to call it a negative income tax, this may work against the intended economic effects.

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