3 ms·

Off-topic but I just don't get why we means-test this. So what if 1% of Americans get $840 so long as the other 99% also get $840 towards a new stove. Surely th

Off-topic but I just don't get why we means-test this. So what if 1% of Americans get $840 so long as the other 99% also get $840 towards a new stove. Surely the cost of means testing and administration is more than 1%?

delecti 3y ago
I think you're totally correct. Unfortunately, lots of people have trouble thinking rationally about people getting things they don't deserve (for whatever definition of "deserve").
s1artibartfast 3y ago
I don't understand the math that you're doing. 10% of Americans qualify as low income. We're talking about 31 billion to replace the stoves for every low income person and 310 billion dollars to replace the stoves for everyone. Do you really think that means testing cost $280 billion dollars? That's more money than the entire state budget for every state but California. On the flip side, do you think looking at a single tax return for 10 seconds cost more than $840?
- RheingoldRiver 3y ago
  > do you think looking at a single tax return for 10 seconds cost more than $840? This isn't the real cost. The real cost is when people turn down promotions at work or new jobs because it puts them 2,000 above the poverty line, and they no longer qualify for subsidies. That means that in 10 years they cannot become comfortably middle class after another 3 promotions or new jobs.
  - s1artibartfast 3y ago
    That's why we shouldn't have welfare cliffs. Earning 1 more dollar should never incur 2 dollars of benefit loss. That's an argument against hard cut offs and having benefits as a linear function of income. I wholeheartedly agree that welfare cliffs are one of the most problematic elements of US subsidies. They punish people for bettering their situation and being more independent. Any help should gradually Fade Out and provide an incentive for earning more.
    - RheingoldRiver 3y ago
      It's still a punishment though. It means instead of a 2k raise you got a $0 raise, and why should you take that risk, plus extra learning required for the promotion? Stop means-testing for things like this, and raise taxes at the higher brackets to cover it.
      - s1artibartfast 3y ago
        I think you misunderstand me. It should never be a $0 raise - that's my point. A $1 raise can be less than 1, but should always be positive.
        RheingoldRiver 3y ago
        The thing is, means-testing affects the people with the lowest incomes who don't qualify the most. It's like an extra tax on the lowest earners (of the class of people who don't qualify fully). If you just passed the poverty threshold and get a 2k raise, that 2k is going to be "taxed" twice - once with regular taxes and once with losing out on your benefits. That's just not fair. Whereas if I make 150k/year or 180k, depending which bracket you want to put it at (also idr where the brackets are exactly), as a single person, I can afford to have my taxes on everything over 120k/180k/whatever go up by a bit to make sure I'm reimbursing that 3k that I got from the government in various grants just to make sure I was doing ok. And if you look at it real close, tax brackets are indeed a sort of means testing, so in the end it all works out.
        s1artibartfast 3y ago
        I agree with you, but I think you're talking about welfare cliffs, not means testing. Well designed subsidies for the poor don't have sharp monetary drop offs like these [1]. Ideally it would be something like for every extra dollar you earn, you get 10 cents less benefit. That way if you get up $1,000 raise, your subsidies go down by a hundred bucks, but you're still up $900 total. There should be no magic number where if you make $1 more you lose a huge benefit. nobody should lose $500 of food stamps because they picked up a shift and earned and extra $100. that doesn't mean every single American needs food stamps. If you make $150k, you dont need food stamps, and the government shouldnt be giving them to you. https://fee.org/media/17757/welfare_cliff.png?width=600&height=463.22580645161287 https://fee.org/media/17757/welfare_cliff.png?width=600&heig...

delecti 3y ago

I think you're totally correct. Unfortunately, lots of people have trouble thinking rationally about people getting things they don't deserve (for whatever definition of "deserve").

s1artibartfast 3y ago

I don't understand the math that you're doing. 10% of Americans qualify as low income. We're talking about 31 billion to replace the stoves for every low income person and 310 billion dollars to replace the stoves for everyone. Do you really think that means testing cost $280 billion dollars? That's more money than the entire state budget for every state but California. On the flip side, do you think looking at a single tax return for 10 seconds cost more than $840?

RheingoldRiver 3y ago
> do you think looking at a single tax return for 10 seconds cost more than $840? This isn't the real cost. The real cost is when people turn down promotions at work or new jobs because it puts them 2,000 above the poverty line, and they no longer qualify for subsidies. That means that in 10 years they cannot become comfortably middle class after another 3 promotions or new jobs.
- s1artibartfast 3y ago
  That's why we shouldn't have welfare cliffs. Earning 1 more dollar should never incur 2 dollars of benefit loss. That's an argument against hard cut offs and having benefits as a linear function of income. I wholeheartedly agree that welfare cliffs are one of the most problematic elements of US subsidies. They punish people for bettering their situation and being more independent. Any help should gradually Fade Out and provide an incentive for earning more.
  - RheingoldRiver 3y ago
    It's still a punishment though. It means instead of a 2k raise you got a $0 raise, and why should you take that risk, plus extra learning required for the promotion? Stop means-testing for things like this, and raise taxes at the higher brackets to cover it.
    - s1artibartfast 3y ago
      I think you misunderstand me. It should never be a $0 raise - that's my point. A $1 raise can be less than 1, but should always be positive.
      - RheingoldRiver 3y ago
        The thing is, means-testing affects the people with the lowest incomes who don't qualify the most. It's like an extra tax on the lowest earners (of the class of people who don't qualify fully). If you just passed the poverty threshold and get a 2k raise, that 2k is going to be "taxed" twice - once with regular taxes and once with losing out on your benefits. That's just not fair. Whereas if I make 150k/year or 180k, depending which bracket you want to put it at (also idr where the brackets are exactly), as a single person, I can afford to have my taxes on everything over 120k/180k/whatever go up by a bit to make sure I'm reimbursing that 3k that I got from the government in various grants just to make sure I was doing ok. And if you look at it real close, tax brackets are indeed a sort of means testing, so in the end it all works out.
        s1artibartfast 3y ago
        I agree with you, but I think you're talking about welfare cliffs, not means testing. Well designed subsidies for the poor don't have sharp monetary drop offs like these [1]. Ideally it would be something like for every extra dollar you earn, you get 10 cents less benefit. That way if you get up $1,000 raise, your subsidies go down by a hundred bucks, but you're still up $900 total. There should be no magic number where if you make $1 more you lose a huge benefit. nobody should lose $500 of food stamps because they picked up a shift and earned and extra $100. that doesn't mean every single American needs food stamps. If you make $150k, you dont need food stamps, and the government shouldnt be giving them to you. https://fee.org/media/17757/welfare_cliff.png?width=600&height=463.22580645161287 https://fee.org/media/17757/welfare_cliff.png?width=600&heig...