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Explain your reasoning. No GPI is given to people above the cutoff. Thus minimizing cost while closing the inequality gap. Earn 0: get 12k GPI Earn 10k: get

by stazz1 7y ago

Explain your reasoning. No GPI is given to people above the cutoff. Thus minimizing cost while closing the inequality gap. Earn 0: get 12k GPI Earn 10k: get 4k GPI Earn 20k: get 2k GPI Earn 30k: get 0 GPI (for the example of a 24k cut-off bound)

Symmetry 7y ago
I mean that if your paycheck is $10k you'll bring home $15k with this subsidy. But if you get a new job and double your salary to $20k you won't get a subsidy so you're entire income will be $20k. You got a nominal 10k raise but only take home 5k more, hence an effective 50% tax rate through this. If there's an actual income tax you have to pay that gets added to this and if there exist other benefits for poor people like Medicare then you might conceivably be worse off with the $20k paycheck than with the $10k paycheck. Mathematically, a $10k Progressive Guaranteed Income like you describe plus a 50% tax on income over $20k is exactly the same as a $10k UBI plus a 50% flat tax.
- stazz1 7y ago
  If your paycheck is $10k you will get $(24k-10k)/2 = $7k. If you "double your salary to $20k" the difference is now $(24k-20k)/2 = $2k. "So you get a $10k raise and take home only $5k more" -- yes that's exactly right. You are suggesting this is a negative externality but I disagree, the subsidy is not a static guarantee, it is a guarantee of help. The whole goal is to close the inequality gap. Therefore, one will get less Guaranteed Income the closer one is to Climb-Out-Bound. That's the whole goal. If this is misguided compared to giving everyone including all the lazy asses and the hardworkers a flat equal rate, let me know. The equation is pretty straightforward and there is a pretty graph here. https://pbs.twimg.com/media/EQTCmq0UwAAM7Ku?format=png https://pbs.twimg.com/media/EQTCmq0UwAAM7Ku?format=png Choose a Climb-Out Bound and adjust the amounts accordingly.

by stazz1 7y ago

Symmetry 7y ago

I mean that if your paycheck is $10k you'll bring home $15k with this subsidy. But if you get a new job and double your salary to $20k you won't get a subsidy so you're entire income will be $20k. You got a nominal 10k raise but only take home 5k more, hence an effective 50% tax rate through this. If there's an actual income tax you have to pay that gets added to this and if there exist other benefits for poor people like Medicare then you might conceivably be worse off with the $20k paycheck than with the $10k paycheck. Mathematically, a $10k Progressive Guaranteed Income like you describe plus a 50% tax on income over $20k is exactly the same as a $10k UBI plus a 50% flat tax.

stazz1 7y ago
If your paycheck is $10k you will get $(24k-10k)/2 = $7k. If you "double your salary to $20k" the difference is now $(24k-20k)/2 = $2k. "So you get a $10k raise and take home only $5k more" -- yes that's exactly right. You are suggesting this is a negative externality but I disagree, the subsidy is not a static guarantee, it is a guarantee of help. The whole goal is to close the inequality gap. Therefore, one will get less Guaranteed Income the closer one is to Climb-Out-Bound. That's the whole goal. If this is misguided compared to giving everyone including all the lazy asses and the hardworkers a flat equal rate, let me know. The equation is pretty straightforward and there is a pretty graph here. https://pbs.twimg.com/media/EQTCmq0UwAAM7Ku?format=png https://pbs.twimg.com/media/EQTCmq0UwAAM7Ku?format=png Choose a Climb-Out Bound and adjust the amounts accordingly.