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Work disincentives hit the near-poor hardest (2022)

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Re: Work disincentives hit the near-poor hardest (2022)

#71

Post by pjc50 »

simianparrot wrote: post #68
truelson wrote: post #37

Earlier quoted context omitted.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well. Though best to start local government first, obviously. We're reaching breaking points in so many places...

DOGE tried, and despite it’s best efforts still couldn’t do more than make a dent

DOGE was a Potemkin organization. They destroyed USAID, smashed up a bunch of other institutions, then went home. Very little of which complied with Federal funding law, either.

Re: Work disincentives hit the near-poor hardest (2022)

#72

Post by pjc50 »

hobs wrote: post #65
NoMoreNicksLeft wrote: post #53

Earlier quoted context omitted.

I like my cliff. I earn enough that I and my family are ineligible for most welfare schemes. I do not want even 6 cents worth of SNAP. I spent my entire childhood on that, and it disgusts me. Thus, were this policy ever seriously proposed, I would do what I can to dissuade my legislators from voting it into law. There are others like me, too, I am not unique.

Right, so people who would use their trauma to prevent themselves from thinking logically about the problem and helping those in the middle instead of some arbitrary line your mind made up?

Never underestimate how many good policies go nowhere because some median voter is irrationally mad at them due to something that happened decades ago.

Re: Work disincentives hit the near-poor hardest (2022)

#73

Post by eru »

ternus wrote: post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

Continuously differentiable doesn't mean your SNAP check couldn't go to zero.

Re: Work disincentives hit the near-poor hardest (2022)

#74

Post by eru »

alephnerd wrote: post #62
jaredklewis wrote: post #58

Earlier quoted context omitted.

“They’d do well.” That is not the lesson I’ve taken from the past 15 years of politics in the US and abroad. Political candidates actually interested in taking on the very difficult and nuanced task of governing are routinely drubbed by edge lord culture warriors or candidates that simply promise the world without any regard to annoying facts like existing laws, budget deficits, or basic tenets of economics. I defini…

As someone who formerly worked in this space, the issue is administration is orthogonal to legislature. Administration and implementation is inherently technocratic in nature, but legislation is is often driven by short-term electoral needs. This isn't to say autocracy is the answer (it isn't), but the dysfunction arises when people assume that every single administrative decision needs to be made by "elected officia…

There's actually plenty of examples out in the real world with competent administration to learn from. Especially if you generalise enough to look at how pockets of competence work even in an otherwise abysmal system, instead of demanding overall competence.

Re: Work disincentives hit the near-poor hardest (2022)

#75

Post by ehnto »

Brigand wrote: post #39
potato3732842 wrote: post #7

Earlier quoted context omitted.

>probably not intentional All the current results were foretold by people screeching warnings about them 50+yr ago. > deeper and more systemic. Nobody's budget ever got bigger or headcount grew or government contract got more lucrative because people got off welfare.

Every employee is off welfare. Employment is very lucrative.

That's not true for the US, because minimum wage is so low you can be working full time and still be below the poverty line. The poverty line is not minimum wage, it's the amount it takes to afford to live.

Re: Work disincentives hit the near-poor hardest (2022)

#76

Post by eru »

dgoldstein0 wrote: post #56
INGELRII wrote: post #48

Earlier quoted context omitted.

There is idea behind that, but continuous is not enough. The variable is all transfers, taxes and benefits T = [all taxes - all benefits] as function of income per person (including children). T starts negative (benefits are negative taxes). Goal: monotonously increasing effective marginal T rate.

This. No need for continuity in the derivative - the marginal tax rate should be fine to jump around - but should start low (I'm fine with negative) and increase as you earn more. Like US federal tax brackets, but with benefits also considered.

Continuously differentiable is fine with jumps in that derivative.

I agree in principle. And I also suggest that we should probably only have one bureaucracy that does means testing that can then administer both taxes and benefits. No need to duplicate the effort.

However most benefits and taxes aren't just means tested against income, but a myriad of other conditions. So net transfers aren't just a function of income.

Re: Work disincentives hit the near-poor hardest (2022)

#77

Post by eru »

dgoldstein0 wrote: post #61
Chinjut wrote: post #43

Earlier quoted context omitted.

This doesn't sound monotonic. This sounds like a mapping from pre-benefit income to post-benefit income which sends just under $10k/yr to just under $15k/yr, but sends just over $10k/yr to just over $10k/yr. So it sends a larger input to a smaller output.

Yeah I agree, it sounds like a misunderstanding. I'll go further and say what we probably want is for the derivative of net income as a function of earned income to be monotonic increasing but max out less than 1. So that there aren't ranges of income where you are receiving very little per dollar earned and then after some point start receiving more per dollar. But solving benefit cliffs really just means having ear…

I mostly agree. However that's all a gross simplification, because there are plenty of taxes and benefits that aren't just a function of income.

Eg property taxes or capital gains taxes don't depend on your income at all.

Re: Work disincentives hit the near-poor hardest (2022)

#78

Post by eru »

littlestymaar wrote: post #47
ternus wrote: post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

It's not sufficient to make cliffs impossible, you just never want the effective marginal tax rate go above a certain threshold. It's insane that we cap marginal tax rates for the wealthy below 50% “because they need incentives to work harder” yet the working class family is facing an effective marginal rate near 100% because of reduced benefits. The solution would simply be to stop making benefits decrease when sala…

Yes, looking at the net transfers makes more sense.

However, net transfers aren't a function of income alone. They depend on lots of factors, because they are plenty of benefits that depend on more than income and plenty of taxes like that, too. Eg capital gains taxes and property taxes and sales taxes and tariffs don't depend on your income.

Re: Work disincentives hit the near-poor hardest (2022)

#79

Post by eru »

paganel wrote: post #70
ternus wrote: post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

If you continue with the idea of transfers, which is, in effect, the current government buying off parts of its constituents, then "democracy", whatever has remained of it in the West, will die for good. What happens if I receive money from the Government but in the same time I'm also actively opposed to said Government's actions? Will I be allowed to speak against the Government that is, as a matter of fact, paying…

You are mixing up lots of different ideas.

You can have net transfers to the poor without turning most of your country's into net recipients.

I also don't understand why you assume that people who are net recipients would stop complaining or voicing their opinion? That's not at all what happens in practice.

Re: Work disincentives hit the near-poor hardest (2022)

#80

Post by torginus »

terminalshort wrote: post #32
didibus wrote: post #16

I always felt simplifying all this, it would probably be possible to consolidate and offer proper health care, and a real welfare, along with a supplemental program for those inapt to work, with it all costing less than the mountain of piled complexity and paper work that we have today.

The system in its current insane state serves the purposes of multiple groups of people: 1. The bureaucrats administering the system because the more complex and insan the system is, the more bureaucrats you need. 2. The politicians who can promise $X of benefits to N people while knowing all along that due to the complexity of the system the actual cost of the program will be well under X*N due to failure to claim t…

3. has always bothered me - if you run a McDonalds, you have to pay market price for the building, kitchen equipment, both when buying and maintaining it. If you don't pay enough to maintain the fridge, it won't unionize - it will break down.

The idea proposed by these 'free market types', that somehow people working there below sustenance salaries 'deserve it' - that the cost of labor needs to be essentially subsidized just doesn't make sense to me.

Practice what you preach - either pay the wages people need to get by, or close down.

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