5 ms·

Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a p

Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a paycut. Make it a flat income. (Also, should be closer to $15 or $18k a year).

ido 10y ago
The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.
gizmo686 10y ago
This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%. The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0] This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k. While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem. I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. [0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf https://www.irs.gov/pub/irs-drop/rp-15-53.pdf [1] This number might be slightly different if the two taxes interact with each other.
- maxerickson 10y ago
  It would be really dumb to stack the taper on top of existing tax rates. Which I guess doesn't mean it wouldn't happen.
- shasta 10y ago
  > I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. This was such a dumb sentence in an otherwise interesting post.
- sokoloff 10y ago
  There's a 3.8% Obamacare surtax on investment income that adds onto the top bracket starting at $250K.
- dclowd9901 10y ago
  My mistake. Still, I think it should be a flat UBI. The point shouldn't be to supplement income but to be income. Plus I think, politically it's a harder sell to provide levels is support ("WE DONT GET AS MUCH BECAUSE WE'RE SUCCESSFUL THATS BULLSHIT", etc.)
danbruc 10y ago
If I did not misread the article, the suggestion is do drop the benefits from 13k to 6.5k in the income range from 30k to 60k. That means you lose about 22 cents of benefits for every additional dollar of income so you will still have a net gain. I can not see how an increasing income can lead to a reduced net income unless the combination of decreasing benefits and increasing taxes exceeds one Dollar per additional Dollar of income.

ido 10y ago

The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.

gizmo686 10y ago

This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%. The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0] This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k. While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem. I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. [0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf https://www.irs.gov/pub/irs-drop/rp-15-53.pdf [1] This number might be slightly different if the two taxes interact with each other.

maxerickson 10y ago
It would be really dumb to stack the taper on top of existing tax rates. Which I guess doesn't mean it wouldn't happen.
shasta 10y ago
> I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. This was such a dumb sentence in an otherwise interesting post.
sokoloff 10y ago
There's a 3.8% Obamacare surtax on investment income that adds onto the top bracket starting at $250K.
dclowd9901 10y ago
My mistake. Still, I think it should be a flat UBI. The point shouldn't be to supplement income but to be income. Plus I think, politically it's a harder sell to provide levels is support ("WE DONT GET AS MUCH BECAUSE WE'RE SUCCESSFUL THATS BULLSHIT", etc.)

danbruc 10y ago

If I did not misread the article, the suggestion is do drop the benefits from 13k to 6.5k in the income range from 30k to 60k. That means you lose about 22 cents of benefits for every additional dollar of income so you will still have a net gain. I can not see how an increasing income can lead to a reduced net income unless the combination of decreasing benefits and increasing taxes exceeds one Dollar per additional Dollar of income.