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So now making 231k makes you worse off than someone making 230k? Why even have that threshold when it doesn't even exclude that many people, it just causes weir
by Jensson 10mo ago
So now making 231k makes you worse off than someone making 230k? Why even have that threshold when it doesn't even exclude that many people, it just causes weird incentives.
- bryanrasmussen 10mo agoProbably because in order to get it passed they had to have some cutoff because there was some people who would argue against it being free for everyone.
- divbzero 10mo agoThe article also mentions a 50% subsidy up to $310,000. The details aren’t spelled out, but subsidies like this often phase out gradually to avoid a cliff at the threshold.
- Jensson 10mo agoSo now you are better off making 310k than 311k, is that much better? It doesn't matter how you read it you still get that effect.
- eptcyka 10mo agoThese subsidies can be implemented in a way where they taper off instead of imposing a hard cliff.
- Jensson 10mo agoThey can be, but the article says they aren't.
- L-four 10mo agoNo at 310k you get $1 dollar at 311k you get $0. But you know like you have 999 more dollars than before. Assuming Post tax income.
- Jensson 10mo agoWhere did you read that? It says you get 50% up to $310k, that very clearly means if you make $310k you get 50% off. > Officials to offer 50% subsidy up to $310,000
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- forty 10mo agoYou make it sound like a problem, but if you can make 311k, I'd say it shouldn't too hard to make 310k instead if that's better for you? Unless some companies have minimum salaries that high?
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- dragonwriter 10mo agoStepwise phaseouts often create more cliffs rather than avoiding cliffs. It is possible to do continuous phase out without cliffs (with or without bend points), the easiest way being to simply give a flat, income-insensitive benefit based on non-income qualifications, and then do the clawback through increases to marginal income tax rates, but if you are committed to clawback internal to the program you can do it through a fixed or tiered marginal clawback rate, instead of having a single or tiered set of benefit cliffs. But programs rarely do that, for a variety of reasons.