Your comment didn't necessarily imply it, but a lot of the discourse these days tries to imply (or directly claims) that recipients are the problem, they're a bunch of lazy bums that don't want to contribute. That's just not true.
To give a sense how much benefits code and tax code have in common, see this worksheet for SNAP eligibility, which resembles a second tax return: https://www.fns.usda.gov/snap/recipient/eligibility. You get to do something similar, again(!), for Medicaid.
The American benefits code is a patchwork of conflicting sensibilities of the electorate: the smallest possible tax, paternalism and suspicion against the poor, plus a few policy analysis trying to obtain the maximum poverty reduction within those constraints. The result is a thicket of means tested programs with extremely steep phase-outs and a lot of paperwork. The all-in EMTR for an American with income between 0-40K a year is chaotic beyond reason as a result as they roll up the income spectrum.
This person who gave the presentation is indeed in one of the worst cases for the code: a single parent with multiple children.
At least you technically never have less money from more work (but only if you consider bureaucracy free; there is severe bureaucracy especially for those that fluctuate in and out of coverage).
When the effective marginal tax rate is high, this is often as close as makes no difference, because you not only have the cost of bureaucracy but also the cost of working. You're paying an effective marginal tax rate of 80% so nominally you get to keep 20% of your income and have the incentive to work, but working requires you to commute, so you have to buy transit tickets or maintain a vehicle.
And because you're now spending your day working, you can't use that time to prepare food or maintain your household, so you may have to pay someone else to do some of those things -- but their entire compensation has to come out of the 20% of your pay you actually get to spend, so this can easily eat the entire thing and make you better off to not take the job.
been there, done that. it's not severe, it's not even 2 hours per month and maybe waiting for 2 or three letters from xyz.
2 hours of non-engaging bureaucratic work for 1300 € per month. Thats 650 €/h ...
This resulted in people that were trying to start a business not get paid for their work (I believe one of the anecdata was a photographer) because doing so would mean they couldn't support themselves.
Personally, I'm a big fan of the "for every $2 you make, you get $1 less from UBI/Welfare" concept. This seems a very easy way to wean people off of welfare. That money is already tracked by the IRS (unless you're getting paid under the table).
That's a more gradual phase-out, but it still is an effective marginal tax rate of 50%+ – a level that wealthy earners would complain about to no end.
In light of this study, it seems to me that a cash-support system that wants to encourage work should have a starting region with a negative effective phase-out rate: "for every $1 you make up to $X, you get $0.25 more from UBI/Welfare." That would encourage labour-market attachment even if tenuous, and it would also have a side benefit of making the worker want to report the income, possibly uncovering under-the-table payment schemes.
The main problem with this is that the tax system is set up to prevent you from under-reporting your income. Over-reporting it is essentially trivial, e.g. two people who are in the relevant income range exchange favors (do each others' laundry etc.), or claim to have, and then actually report the transactions as income and get the credit.
But there's something else you can do here which is really neat. Stop using a complicated progressive rate structure, and instead eliminate the phase out entirely. Now instead of low income people having a nominal 0% tax rate but an effective 50% benefits phase out rate and high income people having a nominal 30% tax rate, you just use a flat 35% tax rate which implicitly has the benefits phase out built into the tax system. Which means you don't need any of this income reporting or annual tax returns or anything of the kind, the employer/seller just withholds the fixed tax rate and you're done, and everybody unconditionally gets the UBI to provide the effect of a progressive rate structure.
Nobody tell this guy about the Earned Income Tax Credit. Let him think he discovered it.
Yeah, my wording could have been better. The suggestion that I've seen for UBI is $12k/year (which is clearly not enough to live on in today's economy), with the $2:$1 reduction being only for the UBI, and then standard taxes starting after that.
This system was actually proposed a looong time ago (like 1970s, I think). Just by giving everyone a massive tax credit to start with.
That's..that's not UBI, at all. UBI is universal. If there are any means tests whatsoever, that's not UBI.
The only way the numbers would ever balance would be for most income earners to end up being taxed >100% of their UBI payment.
This idea is called a negative income tax.
Just subsidize the minimum wage. It's dead simple. Raise the minimum wage by $x but have that extra $x be paid from taxes, not the employer. Big businesses will scream "But inflation! But wage-price spiral!". Their screams are to be ignored.
Here[2] is an extreme case study from Chicago where you would have to jump from an income of 20k/year to 80K/year to make up for the loss of benefits.
https://www.budget.senate.gov/newsroom/budget-background/the...
edit[2] https://fee.org/wp-content/uploads/articles/welfare_cliff.pn...
The woman wants to work, yet cannot because she can’t guarantee how fast she will move past the “no welfare and very little money” transition until she gets promoted to full time work.
Her only recourse is to stay on welfare. Now the real issue comes to her children. If she managed to really instill in them the need to never be on welfare themselves, great, they’ll join the workforce. But what if she didn’t? Maybe only tried a bit, but the years of being on welfare made her lose touch with the working world. Children now only see welfare and thus generational poverty starts.
Only because we tax people's income. Instead, tax only the income of corporations and other shareholder based limited liability entities. Income tax should be the insurance premium business pays to limit the legal liability to the owners and shareholders of the business.
Sounds like a lot of politicians I know. Really, how is this not being "Smart" and gaming the system? If we're all upset about being "fair" then we would have changed the system.
In general, no policy, like none at all, should be designed to suddenly come into effect when you hit a constant. All functions should be smooth.
I like to believe--or at least fantasize--that bipartisan alliances can be built around a shared commitment to Good Equations in Public Policy, even if they disagree on what those policies are.
"Look Bob, I think your tax cut proposal is pure pork and regulatory capture, but that one one goddamn sexy curve."
I saved enough to live comfortably -not richly.
I spend almost all my time, writing code for free. My GH Activity Graph is almost solid green. I'm working on releasing my sixth or seventh free app in just a few years (almost all are open-source). Over the last dozen years, or so, I've released over 20 (most are deprecated).
I really don't look forward to having others destroy my work, anymore. After a fairly brief time, looking for work (at age 55), I quickly figured out that, even if anyone hired me, they would treat me (and, even worse, my work) like crap. They certainly did, during the hazi- er, interviewing process.
So I guess I'm one of those "disincentivized to work" folks.
They cannot fathom treating their employees with respect. Their employees are tools to be used, abused, and discarded. Human resources.
A lot of poor people are really good at convincing themselves they have no choice but to do the thing they wanted to do anyway. It wasn't until I broke free of this attitude was I able to escape myself.
I think you could make an argument that it should be. Getting people to break the law in a lot of small ways seems like it would be a good way to stop them from following the law to really stupid conclusions.
You should probably remove the welfare cliff to, but having a standing policy of "break stupid laws" seems like a tenable position for a society to take.
This is a ridiculous take! You’re arguing (or appear to be) that all-or-nothing welfare systems are fine because you can always just commit welfare and tax fraud if you want more money?!
I don't know how welfare fraud is investigated, but she probably has a near-zero risk of ever being audited for taxes. Again, welfare cliffs suck. EITC was supposed to replace them, but nothing else got rolled back because people were already dependent on those programs for jobs and benefits.
let the woman work & make sure her bank account statements aren't stressful. she'll take some learning paths to get certificates, qualifications, skills required for promotions, financials literacy and self-employment. pay for all of it in advance, set a time limit and rep limit for exams of three years and 12 exams. if she fails, don't pay for her learning paths anymore but keep her bank account statements stress free.
she'll have money to spend on the markets and sh'll pay at least some taxes ans she'll be evolving, living, and her children will, too, and her chances to meet a proper new partner will be much higher.
students in their early twenties who don't have children and are eligible for some form of federal financial support don't really need even more money and there are incentives to perform and get projects, grants, scholarships for all kinds of characters. apprentices who earn waaaaay too little should also get stress free bank account statements for obvious reasons.
always hear stories about people that spend their life on it, but it's barely a life, you're basically just stuck loitering.
This last part is just my opinion:
Most of the people i've seen/met on it long term, the kind people others see as "sponges" are usually somewhat unwell/sickly, not unwell enough to be recognized as officially "disabled" but they'd probably be in hospital a few times a year.
Though, allegedly, a majority of Americans don't comprehend progressive tax rates.
Many state income taxes reach the top income tax rate before the federal poverty rate (ie < $12k).
The federal tax rates are poorly graduated; the first, 10% rate, cuts at $11,600 over to 12%; and then we jump 10% to 22%, only for the next bracket to have only 2% bracket gap again. Imagine if the first bracket was 0% and went all of the way to welfare levels - approximately $30k, the US could effectively eliminate the additional complication of the Standard Deduction (also a paint point of illegal filing and fraud). Imagine if every bracket was easily defined at ~10% - that could make predicting and filing easier. This is addition to payroll taxes being flat and regressive - when they could be built into the income tax.
2024 tax brackets
Tax rate Single filers Married couples filing jointly Married couples filing separately Head of household
10% $11,600 or less $23,200 or less $11,600 or less $16,550 or less
12% $11,601 to $47,150 $23,201 to $94,300 $11,601 to $47,150 $16,551 to $63,100
22% $47,151 to $100,525 $94,301 to $201,050 $47,151 to $100,525 $63,101 to $100,500
24% $100,526 to $191,950 $201,051 to $383,900 $100,526 to $191,150 $100,501 to $191,150
32% $191,951 to $243,725 $383,901 to $487,450 $191,151 to $243,725 $191,151 to $243,700
35% $243,726 to $609,350 $487,451 to $731,200 $243,276 to $365,600 $243,701 to $609,350
37% $609,351 or more $731,201 or more $365,601 or more $609,351 or more
I assume the administration of such a program is heavy though, but with future technological advancement and bureaucratic reform it could be possible.
The idea of replacing all welfare services with money in your hand derived from this formula is radical… and has its promise but I worry about those who rely not only on welfare for the economic side, but also the social support aspects.
Your use of the word myth here, without scare quotes, made your comment unnecessarily confusing.
All we have to do to convince you that UBI and and welfare is immoral is to simply make you pay for that which you support and not force people who do not support it to have to pay for the cost against their will and under threat of government terror.
Immediately you will be converted from a supporter of getting and giving other people's money when you have to pay an additional 30% of your income to support others who you don't even know.