5 ms·

Suspicious Discontinuities (2020)

278 points by tosh 4mo ago

christianbryant 4mo ago
I also appreciate discontinuities and while I won't comment on the data in the paper itself without cross-referencing, I will say that a couple of these examples hold true for me from applied observation over the years. When I was old enough to start caring about insurance for health and property, or became a parent and had to begin forecasting costs for college and what loans really represented, I began looking at observable data much differently. Working in the software industry, you begin to see the complicated systems at work at the C-Level, and the seemingly odd relationships with unrelated organizations start to become clear. Being an educated voter, a discerning consumer of products, and turning a critical eye on world news all require the ability to see processes, their patterns and the discontinuities within them. While there may not always be a useful explanation behind all of them, seeing them in the first place is essential to navigating so-called reality successfully.
mnahkies 4mo ago
The UK tax system also has a bunch of unfortunate cliffs, and tapers that create >60% marginal tax rates and worse. There's a calculator here that illustrates it well https://tax-cliffs.britishprogress.org/calculator https://tax-cliffs.britishprogress.org/calculator The childcare cliff edge is probably the worst, but the personal allowance taper isn't ideal either as it's compressed over a relatively short income range And of course all the thresholds remain frozen, creating plenty of fiscal drag on top.
- rwmj 4mo ago
  The Economist has this crazy graph of UK VAT thresholds and how they are causing companies to stay small, to keep their turnover under the threshold which avoids a lot of paperwork. It's the most infuriating thing, we are literally throttling our companies, the engines of growth, because of some accounting stupidity. Graph: https://www.economist.com/cdn-cgi/image/width=600,quality=100,format=auto/content-assets/images/20240427_EPC396.png https://www.economist.com/cdn-cgi/image/width=600,quality=10... from this article: https://www.economist.com/britain/2024/04/22/how-to-fix-britains-barmy-vat-regime https://www.economist.com/britain/2024/04/22/how-to-fix-brit...
  - voakbasda 4mo ago
    Hey, at least they can exist. Many businesses in the US can no longer exist at small scale, because the barriers to entry are too high because the entrenched interests achieved total regulatory capture.
- ajsnigrutin 4mo ago
  Same in slovenia for eg. kindergarten prices, 1eur over the line, 90eur more per month in fees.
  - benjiro29 4mo ago
    I remember when my grandfather died, and my grandmother got part of his pension. It put her pension above a max threshold for old age / low pension (cheaper phone bill, no tv taxes, ...) by, ... hold your hats... 2 Euro. Father called the service ... "sorry, we can not do anything about that". She lost over 100 Euro in benefits because technically... she was not low pension anymore but was financially WAY more poor then when my grandfather was alive. So when my grandfather was alive, their combined pension was higher, they qualitied as having a low pension. When only *part* of my grandfather pension got combined into my grandmothers. Well, now your not poor... I do not remember the exact pensions but it was a massive haircut, with the insulting on top, losing those benefits. The lost benefits made it from threading water, to drowning. Without my dad financial help, she will have lost the house. Ironically, if she did not get my grandfathers pension part, she will have qualitied for more social assistance, and will have been better off. Sometimes, those lines really screw people over.
    - TeMPOraL 4mo ago
      > Sometimes, those lines really screw people over. Another angle is how they affect the living. Plenty of young adults delay moving out from their parents, or starting a career, because changes in combined household income would cross one of those magic threshold, and ending up screwing the parents and younger siblings for life. Such delaying may not be as immediately critical to the person, but it alters the course of their lives in significant ways.
- subscribed 4mo ago
  What's most infuriating it's only the job income, work, that's taxed like this. Passive income of any sort? Bribes from the lobbying groups? Absolutely not.
  - int_19h 4mo ago
    This is how you tell genuinely left-wing politicians from "free market progressives": look at whom they are trying to tax.
    - subscribed 4mo ago
      Exactly.
- TacticalCoder 4mo ago
  > The UK tax system also has a bunch of unfortunate cliffs, and tapers that create >60% marginal tax rates and worse. Oh I don't doubt it. In my native country of Belgium the tax rate can go to 69% and more: 50% income tax (used to be as high as 52.5% and maybe even 55%, don't remember) and then, on top of that, an addition 19% social wellfare tax. That's not mentioning stuff like, if you manage to buy stocks with what you have left, 30% state tax (+ crazy bank fees) on any dividends you receive from those stocks. And then the brand new (1st jan 2026) 10% tax on any capital gain, once again: in addition to all the already existing taxes. Add some arbitrary decisions on top of that, where if you happen to maybe have bought/sell a bit too many stocks or if you happen to have managed to put a too big part of your wealth into stocks, they may consider you're a "professional investor" and then your capital gains are taxed at your income rate. Some are going to say: "Oh but create a company, get back the VAT, do this/do that". I don't want to basically become a fiscal lawyer just to not be assraped by ever more taxes. Instead of trying to "optimize", I just voted --before they'll introduce an exit tax (I'm sure that's coming)-- with my feet, my money and the future wealth I was going to create and left the country. For what was I getting in return? According to a flemish university an estimated 55 000+ undocumented illegal migrants are now living in the capital city of Belgium, Brussels, alone. That's 5% of the population of the city that are undocumented migrants. They don't live in proper conditions. They're a drag on the economy. They're not happy, they're not thriving. Locals aren't happy either. I didn't vote for this. To me once politicians go too far, that's what they deserve: the middle class living the city in drones and being replaced by poor people. As I tell of my friends and family who also left the city: I just went a bit further and left the country altogether. Following the example of my friend and ex-neighbor who did so decades ago: he left for SoCal (btw I didn't go to the US) and created two startups. Second one was a big hit. Belgium (and the EU) saw exactly zero return of his incredible drive and talent. Another recent statistics: 40% of the people of Brussels are living close to the poverty line. But at least socialists got the utopia they dreamed of: they're sure to never lose an election again. The middle class is dying in Brussels. The poor won't vote against socialism. I just packed and left and advice anyone who can flee a sinking ship to do so. Many countries in Europe have decided to commit suicide and to turn themselves into slums. I think this is just the beginning for may EU cities/countries: there's much more pain ahead --and although AI is going to be used as a scapegoat-- this has absolutely nothing to do with AI and all to do with political decisions. It pains to see how my native city has been dragged into poverty... But good riddance. As for the next gen: from day one I raised my kid in english. At 11 y/o she's totally fluent and our thinking was simple: english is at least understood mostly everywhere in the world. She'll have to move because I fear it's not just my native city that is toast.
fwipsy 4mo ago
I cracked up when I got to the marathon example. When I ran a half marathon I realized about 80% of the way through that I was on track to finish under 2:30:00 and pushed myself to make it happen. I should have guessed that sort of behavior would show up in the statistics!
- chantepierre 4mo ago
  After this year's Paris marathon, I ran the same per-minute graphs, and they match perfectly the "overall study" graphs with more than 9 million finishes in the article. I also added graphing by age category and gender. I don't want to deduce too much but I think it showed that young men are the most "competitive" (what I mean by that is targeting a specific time) since there are the clearest "goal time" peaks in the graphs.
  - brightbeige 4mo ago
    IIRC There is also a discontinuity when it comes to the histogram of ages of marathon runners, because runners are binned into age groups and there is a more runners at the youngest ages of each group, I guess because it’s younger runners in each group that are more likely to run if they feel more likely to place well in their group
    - riskycodes 4mo ago
      I think there's also the opposite – there are a number of places in large marathons allocated for "good for age" entrants, which I would guess are more likely to be taken up by people at the younger end of those buckets.
- deleted 4mo ago
  [deleted]
hsuduebc2 4mo ago
I never understood why taxes or similiar absolute points aren't gradients instead.
- KylerAce 4mo ago
  Because that's harder to write the laws for
  - PaulDavisThe1st 4mo ago
    Not if you assume people could understand basic math, such ... oh, any continuously valued polynomial ....
  - TimorousBestie 4mo ago
    I hear this explanation a lot but I think it's a convenient fiction. Lawmakers, at least in the US, don't seem to write their own legal texts very often. Sometimes they don't even read them [1]! Congress has no problem producing monstrously complicated laws, in any case. I think it's likely that politicians and their funding sources have found ways to profit off of these discontinuities. The infamous Medicare "donut hole" [2] was arguably a "benefit discontinuity" of the sort mentioned by the author and pharmaceutical companies profited off of it (more than a hypothetical Medicare structure without a donut hole, not relative to the spending cap that replaced it—which profits them even more). [1] https://www.pennstatelawreview.org/penn-statim/dont-be-silly-lawmakers-rarely-read-legislation-and-oftentimes-dont-understand-it-but-thats-okay/ https://www.pennstatelawreview.org/penn-statim/dont-be-silly... (2013) ...which argues that this is a good thing! [2] https://www.medicalnewstoday.com/articles/what-is-the-medicare-donut-hole https://www.medicalnewstoday.com/articles/what-is-the-medica...
- blharr 4mo ago
  I think because the gradient is simply too confusing for laypeople to understand. Even for a simple system like US social security that has a gradient. For every $2 you make over the limit, you lose $1 in benefits. I've heard countless times misconceptions of people thinking they'd be losing money (as in literally having less money net) by working.
dvh 4mo ago
Would test score problem be solved if teachers graded individual questions, not entire test?
- irishcoffee 4mo ago
  The reddit explanation in the post addresses your question I believe. If someone is at a 28 or 29 a few "charity" points can be found in subjectively-graded tests.
  - dvh 4mo ago
    If you grade individual questions, you don't know the total score.
    - rvba 4mo ago
      The incentive to find the extra point would partially disappear.
      - TeMPOraL 4mo ago
        Unfortunately this is the final exam from pre-university education. You can think of it as one's first educational degree, a step below bachelor's. It's expected - particularly by employers - that everyone should achieve it.
  - jameshart 4mo ago
    I think that really just reflects the fact that on subjectively graded tests the score really doesn’t have that many significant figures of accuracy. That a regrading can find 3 to 5 points by being more generous - or presumably take 3 to 5 off by being harsher - says that really you could save a lot of effort by treating the final grades as bucketing into 10 point bands and treating 25-35 as the actual cutoff.
    - aesthesia 4mo ago
      Isn't that equivalent to just setting the passing threshold to 25, with the same incentives?
PaulDavisThe1st 4mo ago
[ EDIT: Since the undated article is actually from Feb 2020, predating the expansion of federal health insurance subsidies, I withdraw everything I said below. ] ---------------------------------- The opening story is fabricated and/or bullshit. Last year (2025) there was no limit on income for health insurance subsidies. That ended for this year, but last year there would have been no reason for anyone who knew what they were doing to try to lose money to drop their income (especially in the cited range of $48-55k/year). That is the case this year, in most states (thankfully not where I live), but that's not what TFA is talking about. Suspicious? It certainly makes me skeptical that the author has got the details of the other examples correct.
- norseboar 4mo ago
  This might vary state-by-state, CA MediCal for instance did limit the subsidies based on income last year. I don't think it was an all-or-nothing cutoff, but I do think there were points around the 50k mark where the delta between your subsidy and the one for the lower bracket was higher than the loss you'd take by a few thousand dollars.
  - PaulDavisThe1st 4mo ago
    The subsidies were from the federal government, managed as part of your federal income tax return. They had nothing to do with additional state subsidies. The basic story was that until the end of 2025, nobody in the USA had any reason to pay more than (roughly) 8.3% of their AGI for health insurance.
- forbiddenlake 4mo ago
  The post is from February 2020. I can't see a date on the post (on mobile) but the archives link has month and year.
  - deleted 4mo ago
    [deleted]
  - PaulDavisThe1st 4mo ago
initramfs 4mo ago
yeah, slow phase-outs seems ideal- I have often wondered about that with gross and and taxable income.
Sniffnoy 4mo ago
(2020)
- deleted 4mo ago
  [deleted]
amluto 4mo ago
> A simple fix for the problems mentioned above would be to have slow phase-outs instead of sharp thresholds. How about the even simpler fix of not having phase-outs? This generally works: the cost of a subsidy generally does not increase as the recipient pays more taxes, so the higher total tax paid by a higher-income person will easily pay for the cost of a subsidy. And giving higher-income/wealthier people the same subsidies as poor people may help them appreciate the ways in which the subsidies are helpful and the ways in which they suck, which can help the whole system improve.
- throwaway98797 4mo ago
  politics, can’t have the government give a dime to the rich directly.
- olejorgenb 4mo ago
  That would require a tax hike to fund though, which is not very palatable.
deleted 4mo ago
[deleted]
alok-g 4mo ago
Indian laws have the same too. For taxation 'surcharge' applied to high income groups, a patchwork called "marginal relief" fixes it [1], however, leaves ranges in income where 100% of incremental income goes away in taxes. [1] https://cleartax.in/s/marginal-relief-surcharge https://cleartax.in/s/marginal-relief-surcharge Another place where thresholding is misplaced is minors (below the age of 18 years) being subject to different laws (this is for India at least), e.g., seriously different punishments for crimes like homicide or rape. I have heard that crime groups then purposefully involve minors, push the blames on them if caught, and effectively get away for much less.
- Obscurity4340 4mo ago
  Why cant they just scan the minor's texts/calls, send them to therapy and rehabillitation and RICO the fuck out of their "superiors"?
  - alok-g 4mo ago
    I am not sure. What I have heard is that the minor pleads guilty for the entire crime (possibly in exchange for some money behind the scenes). The broader point is that being a couple days or months younger or older than eighteen years should not result in a drastically different outcomes to begin with.
    - SiempreViernes 4mo ago
      > The broader point is that being a couple days or months younger or older than eighteen years should not result in a drastically different outcomes to begin with. The problem is that anytime you create a division there are always some cases just on the border, and if the outcome difference is sized to the difference between the centers of the classes the jump from on size of the border to another gets large. But on the other hand if the jump isn't large you end up saying that 13 year olds and 30 year olds should be treated the same, which is clearly just worse. You can try smoothing out the jump at the edges by adding more cuts and doing less changes from one step to the next, but I don't think you gain much in terms of recruitment of youths compared to just pushing the breakpoint fore lenient sentences to larger ages than 18.
ziofill 4mo ago
Beautiful! I noticed this on the chess ratings distribution on Lichess: players like to cross a nice multiple of 100 and make an extra effort to avoid dropping below if they can: https://imgur.com/a/Db7fQdX https://imgur.com/a/Db7fQdX
dadkins 4mo ago
Jim Roskind had a really nice talk [https://www.youtube.com/watch?v=_uaaCiyJCFA https://www.youtube.com/watch?v=_uaaCiyJCFA] at AWS Reinvent 2022 which highlighted the fence post problem. Basically, AWS was targeting P50 and P90 latencies in many services, and sure enough there were big clumps of latencies right under those target fence posts as engineers were basically gaming the metrics and nerfing the >P90 latencies to make it happen.
- fc417fc802 4mo ago
  I don't think that counts as gaming the metric. It's an example of a metric that even when targeted in good faith results in consequences management didn't intend.
  - TeMPOraL 4mo ago
    Good faith starts with understanding that "90" in P90 is an arbitrary number, and that the exact sampling threshold is not important to why anyone cares about that metric.
    - khuey 4mo ago
      The 99 in his TM99 is also an arbitrary number. The more interesting part of the talk is how using what he calls "fenceposts" naturally results in bunching up against the fenceposts because even small regressions that cross the fenceposts are blocked but regressions of any size that don't cross a fencepost go unnoticed.
    - fc417fc802 4mo ago
      It's just a plain bad metric. Useful due to brevity though. A decent metric for testing against might consist of a target mean, the sigma specifying a gaussian about that mean, a minimum sample size, and a hard upper cutoff.
- keynha 4mo ago
  [dead]
ant6n 4mo ago
Haven’t seen danluu stuff here for a while! One way to reduce income may be to buy a bunch of stocks with high variance - for any that is in the red during the year, sell and rebuy them. Any that has a gain, leave them be.
- bobbiechen 4mo ago
  The wash sale rule (in the US) makes it a lot harder to pull this off.
jtolmar 4mo ago
Gosh that Polish language scores graph is good. Clean bell curve, slight skew, classic little bump at 100 because the measure is truncated, and then this giant mess at 30 that looks more like something out of a heart rate monitor than a normal distribution.
- TeMPOraL 4mo ago
  > this giant mess at 30 that looks more like something out of a heart rate monitor than a normal distribution. Right, it's as if someone shot the heart with a defibrillator - because that's a good analogy of what is actually happening, given the "arbitrary negative effects for people" failing the exam are basically determining the course of one's future (or at least feel like this to the people and their parents at the time). In particular, having passed "matura" is the lowest level kind of threshold used (both formally and informally) by employers considering job applicants; much like some higher-skill jobs still require a specific university degree, not having "matura" will cut you out of a large chunk of low-skill and entry-level jobs. Couple failed "matura" with any kind of criminal record - and the two, I imagine, are probably correlated - and you can be screwed for life, economically speaking. It is a big deal, and teachers know it. IDK what the current system is, but for my cohort, it was possible to repeat the exam in subsequent years - but like with any kind of degree, chances of someone doing that drop sharply with temporal distance; at some point, people just find a path for their lives and are more interested in present-day challenges than going back to finish some degree.
cadamsdotcom 4mo ago
The marathon one has a simple - and fun - explanation: it’s great to run with people! Many (most?) marathons have pace runners who run the course, hewing to each 30 minute and 15 minute finish. So there’ll be a 3:30:00 pacer, a 3:45:00 pacer and so on. Your local pacer might even have their pace on their shirt and may even have a flag so they’re super hard to miss as you’re running. One friend of mine runs with a speaker, to play music and keep everyone’s spirits up. By the end of the race they’d acquired a small army of marathoners! You could see their smiles for miles, and when they all finished together they had a huge party in the recovery area with the speaker :) I’m surprised the marathon time discontinuity isn’t bigger :)
- jefftk 4mo ago
  I'm from Boston and I'd never heard of this, but reading a bit it sounds like Boston is unusual in not having pace runners. Given how hilly the course is, this makes sense: running an even pace the whole distance is not a good plan.
- SiempreViernes 4mo ago
  > One of the most common comments I've seen online about this graph and/or this paper is that this is due to pace runners provided by the marathon. Section 4.4 of the paper gives multiple explanations for why this cannot be the case, once again indicating that people tend to comment without reading the paper.
  - applfanboysbgon 4mo ago
    Note that this is about comments on the paper itself. Somebody reading this article could not reasonably be expected to have read the paper before commenting on it, not least of which because the link to it is dead (but also because reading a research paper before making a casual remark about a single graph in an article with many, wherein it is not remotely related to the main thesis of the article, is not a particularly reasonable expectation).
    - SiempreViernes 4mo ago
collabs 4mo ago
I sincerely believe that a better idea in my opinion is to eliminate all means testing in government benefits altogether. No, higher taxes is not means testing. They are not the same thing at all. Removing means testing means we want the service to be used by all, which means the service should be at least usable by people who have the option to use something else. On a similar note, medicare clawback rules are cruel and unusual punishment. To punish the stupid and ill prepared while rewarding those who did tax planning five years or more before retirement is cruel. Extra taxes on the stupid should be illegal.
- hack1312 4mo ago
  Yes, exactly. Means-testing just makes a service more expensive by inserting needless middlemen.
- etothepii 4mo ago
  If we are going to tax things that we want less of; would not taxing stupidity seem like good public policy?
ghoul2 4mo ago
There is a hilarious one in the Indian direct tax (Income tax) code right now: If your (taxable) income is less than 7L (inr), no tax is assessed. If your income is greater than 7L, but upto 12L, tax is assessed, but a tax _rebate_ (a discount on payable tax) is granted for the exact amount of tax owed. This means net tax paid till 12L is zero. But if your income is 12L + 1, this rebate no longer applies, so the entire tax assessed (on the 7L+ income) is now due. This means that a person who earns 12L+1 INR makes ~70K inr less, post-tax, than the person who earns 12L INR. After complaints, to correct this, they added another layer: If your taxable income is >12L but less than 12L+~70K (the tax thats due), then the maximum tax due is just the amount your income exceeds 12L bye. So you stagnate at the same post-tax salary from 12L to 12L+70K.
- Phemist 4mo ago
  How much relative to 70K is this 12L? Sorry, I am not Indian.
  - floren 4mo ago
    12L is 1.2 million
swiftcoder 4mo ago
> someone who was desperately trying to lose money before the end of the year Isn't donating to charity a lot easier than gambling on options? It's both legal and extremely easy to donate 5k to a tax-deductible charity of your choice...
- nok22kon 4mo ago
  donating would go against the American spirit of individualism where you only care about yourself. after all, who ever helped you for free, right?
  - cwmoore 4mo ago
    Tax the bots for UBI.
- ksbd-pls-finish 4mo ago
  I assume a part of the point is gambling - you either lose exactly as much as you planned, or you "win big" and still come out ahead.
- deleted 4mo ago
  [deleted]
Varcolacus 4mo ago
[flagged]
kmoser 4mo ago
> There are a number of ways someone could do this; one commonly suggested scheme was to buy put options that were expected to expire worthless, allowing the buyer to (probably) take a loss. > That means if an individual buying ACA insurance was going to earn $55k, they'd be better off reducing their income by $6440 and getting under the $48,560 subsidy ceiling than they are earning $55k. I am told by a CPA: In the US tax system, one is limited to deduct $3,000 of net capital loss against their otherwise taxable income. These put options would generate a capital loss. Therefore, this strategy would not accomplish the goal stated in the article.

278 points by tosh 4mo ago

I also appreciate discontinuities and while I won't comment on the data in the paper itself without cross-referencing, I will say that a couple of these examples hold true for me from applied observation over the years. When I was old enough to start caring about insurance for health and property, or became a parent and had to begin forecasting costs for college and what loans really represented, I began looking at observable data much differently. Working in the software industry, you begin to see the complicated systems at work at the C-Level, and the seemingly odd relationships with unrelated organizations start to become clear. Being an educated voter, a discerning consumer of products, and turning a critical eye on world news all require the ability to see processes, their patterns and the discontinuities within them. While there may not always be a useful explanation behind all of them, seeing them in the first place is essential to navigating so-called reality successfully.

mnahkies 4mo ago

The UK tax system also has a bunch of unfortunate cliffs, and tapers that create >60% marginal tax rates and worse. There's a calculator here that illustrates it well https://tax-cliffs.britishprogress.org/calculator https://tax-cliffs.britishprogress.org/calculator The childcare cliff edge is probably the worst, but the personal allowance taper isn't ideal either as it's compressed over a relatively short income range And of course all the thresholds remain frozen, creating plenty of fiscal drag on top.

rwmj 4mo ago
The Economist has this crazy graph of UK VAT thresholds and how they are causing companies to stay small, to keep their turnover under the threshold which avoids a lot of paperwork. It's the most infuriating thing, we are literally throttling our companies, the engines of growth, because of some accounting stupidity. Graph: https://www.economist.com/cdn-cgi/image/width=600,quality=100,format=auto/content-assets/images/20240427_EPC396.png https://www.economist.com/cdn-cgi/image/width=600,quality=10... from this article: https://www.economist.com/britain/2024/04/22/how-to-fix-britains-barmy-vat-regime https://www.economist.com/britain/2024/04/22/how-to-fix-brit...
- voakbasda 4mo ago
  Hey, at least they can exist. Many businesses in the US can no longer exist at small scale, because the barriers to entry are too high because the entrenched interests achieved total regulatory capture.
ajsnigrutin 4mo ago
Same in slovenia for eg. kindergarten prices, 1eur over the line, 90eur more per month in fees.
- benjiro29 4mo ago
  I remember when my grandfather died, and my grandmother got part of his pension. It put her pension above a max threshold for old age / low pension (cheaper phone bill, no tv taxes, ...) by, ... hold your hats... 2 Euro. Father called the service ... "sorry, we can not do anything about that". She lost over 100 Euro in benefits because technically... she was not low pension anymore but was financially WAY more poor then when my grandfather was alive. So when my grandfather was alive, their combined pension was higher, they qualitied as having a low pension. When only *part* of my grandfather pension got combined into my grandmothers. Well, now your not poor... I do not remember the exact pensions but it was a massive haircut, with the insulting on top, losing those benefits. The lost benefits made it from threading water, to drowning. Without my dad financial help, she will have lost the house. Ironically, if she did not get my grandfathers pension part, she will have qualitied for more social assistance, and will have been better off. Sometimes, those lines really screw people over.
  - TeMPOraL 4mo ago
    > Sometimes, those lines really screw people over. Another angle is how they affect the living. Plenty of young adults delay moving out from their parents, or starting a career, because changes in combined household income would cross one of those magic threshold, and ending up screwing the parents and younger siblings for life. Such delaying may not be as immediately critical to the person, but it alters the course of their lives in significant ways.
subscribed 4mo ago
What's most infuriating it's only the job income, work, that's taxed like this. Passive income of any sort? Bribes from the lobbying groups? Absolutely not.
- int_19h 4mo ago
  This is how you tell genuinely left-wing politicians from "free market progressives": look at whom they are trying to tax.
  - subscribed 4mo ago
    Exactly.
TacticalCoder 4mo ago
> The UK tax system also has a bunch of unfortunate cliffs, and tapers that create >60% marginal tax rates and worse. Oh I don't doubt it. In my native country of Belgium the tax rate can go to 69% and more: 50% income tax (used to be as high as 52.5% and maybe even 55%, don't remember) and then, on top of that, an addition 19% social wellfare tax. That's not mentioning stuff like, if you manage to buy stocks with what you have left, 30% state tax (+ crazy bank fees) on any dividends you receive from those stocks. And then the brand new (1st jan 2026) 10% tax on any capital gain, once again: in addition to all the already existing taxes. Add some arbitrary decisions on top of that, where if you happen to maybe have bought/sell a bit too many stocks or if you happen to have managed to put a too big part of your wealth into stocks, they may consider you're a "professional investor" and then your capital gains are taxed at your income rate. Some are going to say: "Oh but create a company, get back the VAT, do this/do that". I don't want to basically become a fiscal lawyer just to not be assraped by ever more taxes. Instead of trying to "optimize", I just voted --before they'll introduce an exit tax (I'm sure that's coming)-- with my feet, my money and the future wealth I was going to create and left the country. For what was I getting in return? According to a flemish university an estimated 55 000+ undocumented illegal migrants are now living in the capital city of Belgium, Brussels, alone. That's 5% of the population of the city that are undocumented migrants. They don't live in proper conditions. They're a drag on the economy. They're not happy, they're not thriving. Locals aren't happy either. I didn't vote for this. To me once politicians go too far, that's what they deserve: the middle class living the city in drones and being replaced by poor people. As I tell of my friends and family who also left the city: I just went a bit further and left the country altogether. Following the example of my friend and ex-neighbor who did so decades ago: he left for SoCal (btw I didn't go to the US) and created two startups. Second one was a big hit. Belgium (and the EU) saw exactly zero return of his incredible drive and talent. Another recent statistics: 40% of the people of Brussels are living close to the poverty line. But at least socialists got the utopia they dreamed of: they're sure to never lose an election again. The middle class is dying in Brussels. The poor won't vote against socialism. I just packed and left and advice anyone who can flee a sinking ship to do so. Many countries in Europe have decided to commit suicide and to turn themselves into slums. I think this is just the beginning for may EU cities/countries: there's much more pain ahead --and although AI is going to be used as a scapegoat-- this has absolutely nothing to do with AI and all to do with political decisions. It pains to see how my native city has been dragged into poverty... But good riddance. As for the next gen: from day one I raised my kid in english. At 11 y/o she's totally fluent and our thinking was simple: english is at least understood mostly everywhere in the world. She'll have to move because I fear it's not just my native city that is toast.

fwipsy 4mo ago

I cracked up when I got to the marathon example. When I ran a half marathon I realized about 80% of the way through that I was on track to finish under 2:30:00 and pushed myself to make it happen. I should have guessed that sort of behavior would show up in the statistics!

chantepierre 4mo ago
After this year's Paris marathon, I ran the same per-minute graphs, and they match perfectly the "overall study" graphs with more than 9 million finishes in the article. I also added graphing by age category and gender. I don't want to deduce too much but I think it showed that young men are the most "competitive" (what I mean by that is targeting a specific time) since there are the clearest "goal time" peaks in the graphs.
- brightbeige 4mo ago
  IIRC There is also a discontinuity when it comes to the histogram of ages of marathon runners, because runners are binned into age groups and there is a more runners at the youngest ages of each group, I guess because it’s younger runners in each group that are more likely to run if they feel more likely to place well in their group
  - riskycodes 4mo ago
    I think there's also the opposite – there are a number of places in large marathons allocated for "good for age" entrants, which I would guess are more likely to be taken up by people at the younger end of those buckets.
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hsuduebc2 4mo ago

I never understood why taxes or similiar absolute points aren't gradients instead.

KylerAce 4mo ago
Because that's harder to write the laws for
- PaulDavisThe1st 4mo ago
  Not if you assume people could understand basic math, such ... oh, any continuously valued polynomial ....
- TimorousBestie 4mo ago
  I hear this explanation a lot but I think it's a convenient fiction. Lawmakers, at least in the US, don't seem to write their own legal texts very often. Sometimes they don't even read them [1]! Congress has no problem producing monstrously complicated laws, in any case. I think it's likely that politicians and their funding sources have found ways to profit off of these discontinuities. The infamous Medicare "donut hole" [2] was arguably a "benefit discontinuity" of the sort mentioned by the author and pharmaceutical companies profited off of it (more than a hypothetical Medicare structure without a donut hole, not relative to the spending cap that replaced it—which profits them even more). [1] https://www.pennstatelawreview.org/penn-statim/dont-be-silly-lawmakers-rarely-read-legislation-and-oftentimes-dont-understand-it-but-thats-okay/ https://www.pennstatelawreview.org/penn-statim/dont-be-silly... (2013) ...which argues that this is a good thing! [2] https://www.medicalnewstoday.com/articles/what-is-the-medicare-donut-hole https://www.medicalnewstoday.com/articles/what-is-the-medica...
blharr 4mo ago
I think because the gradient is simply too confusing for laypeople to understand. Even for a simple system like US social security that has a gradient. For every $2 you make over the limit, you lose $1 in benefits. I've heard countless times misconceptions of people thinking they'd be losing money (as in literally having less money net) by working.

dvh 4mo ago

Would test score problem be solved if teachers graded individual questions, not entire test?

irishcoffee 4mo ago
The reddit explanation in the post addresses your question I believe. If someone is at a 28 or 29 a few "charity" points can be found in subjectively-graded tests.
- dvh 4mo ago
  If you grade individual questions, you don't know the total score.
  - rvba 4mo ago
    The incentive to find the extra point would partially disappear.
    - TeMPOraL 4mo ago
      Unfortunately this is the final exam from pre-university education. You can think of it as one's first educational degree, a step below bachelor's. It's expected - particularly by employers - that everyone should achieve it.
- jameshart 4mo ago
  I think that really just reflects the fact that on subjectively graded tests the score really doesn’t have that many significant figures of accuracy. That a regrading can find 3 to 5 points by being more generous - or presumably take 3 to 5 off by being harsher - says that really you could save a lot of effort by treating the final grades as bucketing into 10 point bands and treating 25-35 as the actual cutoff.
  - aesthesia 4mo ago
    Isn't that equivalent to just setting the passing threshold to 25, with the same incentives?

PaulDavisThe1st 4mo ago

[ EDIT: Since the undated article is actually from Feb 2020, predating the expansion of federal health insurance subsidies, I withdraw everything I said below. ] ---------------------------------- The opening story is fabricated and/or bullshit. Last year (2025) there was no limit on income for health insurance subsidies. That ended for this year, but last year there would have been no reason for anyone who knew what they were doing to try to lose money to drop their income (especially in the cited range of $48-55k/year). That is the case this year, in most states (thankfully not where I live), but that's not what TFA is talking about. Suspicious? It certainly makes me skeptical that the author has got the details of the other examples correct.

norseboar 4mo ago
This might vary state-by-state, CA MediCal for instance did limit the subsidies based on income last year. I don't think it was an all-or-nothing cutoff, but I do think there were points around the 50k mark where the delta between your subsidy and the one for the lower bracket was higher than the loss you'd take by a few thousand dollars.
- PaulDavisThe1st 4mo ago
  The subsidies were from the federal government, managed as part of your federal income tax return. They had nothing to do with additional state subsidies. The basic story was that until the end of 2025, nobody in the USA had any reason to pay more than (roughly) 8.3% of their AGI for health insurance.
forbiddenlake 4mo ago
The post is from February 2020. I can't see a date on the post (on mobile) but the archives link has month and year.
- deleted 4mo ago
  [deleted]
- PaulDavisThe1st 4mo ago

initramfs 4mo ago

yeah, slow phase-outs seems ideal- I have often wondered about that with gross and and taxable income.

Sniffnoy 4mo ago

(2020)

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amluto 4mo ago

> A simple fix for the problems mentioned above would be to have slow phase-outs instead of sharp thresholds. How about the even simpler fix of not having phase-outs? This generally works: the cost of a subsidy generally does not increase as the recipient pays more taxes, so the higher total tax paid by a higher-income person will easily pay for the cost of a subsidy. And giving higher-income/wealthier people the same subsidies as poor people may help them appreciate the ways in which the subsidies are helpful and the ways in which they suck, which can help the whole system improve.

throwaway98797 4mo ago
politics, can’t have the government give a dime to the rich directly.
olejorgenb 4mo ago
That would require a tax hike to fund though, which is not very palatable.

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alok-g 4mo ago

Indian laws have the same too. For taxation 'surcharge' applied to high income groups, a patchwork called "marginal relief" fixes it [1], however, leaves ranges in income where 100% of incremental income goes away in taxes. [1] https://cleartax.in/s/marginal-relief-surcharge https://cleartax.in/s/marginal-relief-surcharge Another place where thresholding is misplaced is minors (below the age of 18 years) being subject to different laws (this is for India at least), e.g., seriously different punishments for crimes like homicide or rape. I have heard that crime groups then purposefully involve minors, push the blames on them if caught, and effectively get away for much less.

Obscurity4340 4mo ago
Why cant they just scan the minor's texts/calls, send them to therapy and rehabillitation and RICO the fuck out of their "superiors"?
- alok-g 4mo ago
  I am not sure. What I have heard is that the minor pleads guilty for the entire crime (possibly in exchange for some money behind the scenes). The broader point is that being a couple days or months younger or older than eighteen years should not result in a drastically different outcomes to begin with.
  - SiempreViernes 4mo ago
    > The broader point is that being a couple days or months younger or older than eighteen years should not result in a drastically different outcomes to begin with. The problem is that anytime you create a division there are always some cases just on the border, and if the outcome difference is sized to the difference between the centers of the classes the jump from on size of the border to another gets large. But on the other hand if the jump isn't large you end up saying that 13 year olds and 30 year olds should be treated the same, which is clearly just worse. You can try smoothing out the jump at the edges by adding more cuts and doing less changes from one step to the next, but I don't think you gain much in terms of recruitment of youths compared to just pushing the breakpoint fore lenient sentences to larger ages than 18.

ziofill 4mo ago

Beautiful! I noticed this on the chess ratings distribution on Lichess: players like to cross a nice multiple of 100 and make an extra effort to avoid dropping below if they can: https://imgur.com/a/Db7fQdX https://imgur.com/a/Db7fQdX

dadkins 4mo ago

Jim Roskind had a really nice talk [https://www.youtube.com/watch?v=_uaaCiyJCFA https://www.youtube.com/watch?v=_uaaCiyJCFA] at AWS Reinvent 2022 which highlighted the fence post problem. Basically, AWS was targeting P50 and P90 latencies in many services, and sure enough there were big clumps of latencies right under those target fence posts as engineers were basically gaming the metrics and nerfing the >P90 latencies to make it happen.

fc417fc802 4mo ago
I don't think that counts as gaming the metric. It's an example of a metric that even when targeted in good faith results in consequences management didn't intend.
- TeMPOraL 4mo ago
  Good faith starts with understanding that "90" in P90 is an arbitrary number, and that the exact sampling threshold is not important to why anyone cares about that metric.
  - khuey 4mo ago
    The 99 in his TM99 is also an arbitrary number. The more interesting part of the talk is how using what he calls "fenceposts" naturally results in bunching up against the fenceposts because even small regressions that cross the fenceposts are blocked but regressions of any size that don't cross a fencepost go unnoticed.
  - fc417fc802 4mo ago
    It's just a plain bad metric. Useful due to brevity though. A decent metric for testing against might consist of a target mean, the sigma specifying a gaussian about that mean, a minimum sample size, and a hard upper cutoff.
keynha 4mo ago
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ant6n 4mo ago

Haven’t seen danluu stuff here for a while! One way to reduce income may be to buy a bunch of stocks with high variance - for any that is in the red during the year, sell and rebuy them. Any that has a gain, leave them be.

bobbiechen 4mo ago
The wash sale rule (in the US) makes it a lot harder to pull this off.

jtolmar 4mo ago

Gosh that Polish language scores graph is good. Clean bell curve, slight skew, classic little bump at 100 because the measure is truncated, and then this giant mess at 30 that looks more like something out of a heart rate monitor than a normal distribution.

TeMPOraL 4mo ago
> this giant mess at 30 that looks more like something out of a heart rate monitor than a normal distribution. Right, it's as if someone shot the heart with a defibrillator - because that's a good analogy of what is actually happening, given the "arbitrary negative effects for people" failing the exam are basically determining the course of one's future (or at least feel like this to the people and their parents at the time). In particular, having passed "matura" is the lowest level kind of threshold used (both formally and informally) by employers considering job applicants; much like some higher-skill jobs still require a specific university degree, not having "matura" will cut you out of a large chunk of low-skill and entry-level jobs. Couple failed "matura" with any kind of criminal record - and the two, I imagine, are probably correlated - and you can be screwed for life, economically speaking. It is a big deal, and teachers know it. IDK what the current system is, but for my cohort, it was possible to repeat the exam in subsequent years - but like with any kind of degree, chances of someone doing that drop sharply with temporal distance; at some point, people just find a path for their lives and are more interested in present-day challenges than going back to finish some degree.

cadamsdotcom 4mo ago

The marathon one has a simple - and fun - explanation: it’s great to run with people! Many (most?) marathons have pace runners who run the course, hewing to each 30 minute and 15 minute finish. So there’ll be a 3:30:00 pacer, a 3:45:00 pacer and so on. Your local pacer might even have their pace on their shirt and may even have a flag so they’re super hard to miss as you’re running. One friend of mine runs with a speaker, to play music and keep everyone’s spirits up. By the end of the race they’d acquired a small army of marathoners! You could see their smiles for miles, and when they all finished together they had a huge party in the recovery area with the speaker :) I’m surprised the marathon time discontinuity isn’t bigger :)

jefftk 4mo ago
I'm from Boston and I'd never heard of this, but reading a bit it sounds like Boston is unusual in not having pace runners. Given how hilly the course is, this makes sense: running an even pace the whole distance is not a good plan.
SiempreViernes 4mo ago
> One of the most common comments I've seen online about this graph and/or this paper is that this is due to pace runners provided by the marathon. Section 4.4 of the paper gives multiple explanations for why this cannot be the case, once again indicating that people tend to comment without reading the paper.
- applfanboysbgon 4mo ago
  Note that this is about comments on the paper itself. Somebody reading this article could not reasonably be expected to have read the paper before commenting on it, not least of which because the link to it is dead (but also because reading a research paper before making a casual remark about a single graph in an article with many, wherein it is not remotely related to the main thesis of the article, is not a particularly reasonable expectation).
  - SiempreViernes 4mo ago

collabs 4mo ago

I sincerely believe that a better idea in my opinion is to eliminate all means testing in government benefits altogether. No, higher taxes is not means testing. They are not the same thing at all. Removing means testing means we want the service to be used by all, which means the service should be at least usable by people who have the option to use something else. On a similar note, medicare clawback rules are cruel and unusual punishment. To punish the stupid and ill prepared while rewarding those who did tax planning five years or more before retirement is cruel. Extra taxes on the stupid should be illegal.

hack1312 4mo ago
Yes, exactly. Means-testing just makes a service more expensive by inserting needless middlemen.
etothepii 4mo ago
If we are going to tax things that we want less of; would not taxing stupidity seem like good public policy?

ghoul2 4mo ago

There is a hilarious one in the Indian direct tax (Income tax) code right now: If your (taxable) income is less than 7L (inr), no tax is assessed. If your income is greater than 7L, but upto 12L, tax is assessed, but a tax _rebate_ (a discount on payable tax) is granted for the exact amount of tax owed. This means net tax paid till 12L is zero. But if your income is 12L + 1, this rebate no longer applies, so the entire tax assessed (on the 7L+ income) is now due. This means that a person who earns 12L+1 INR makes ~70K inr less, post-tax, than the person who earns 12L INR. After complaints, to correct this, they added another layer: If your taxable income is >12L but less than 12L+~70K (the tax thats due), then the maximum tax due is just the amount your income exceeds 12L bye. So you stagnate at the same post-tax salary from 12L to 12L+70K.

Phemist 4mo ago
How much relative to 70K is this 12L? Sorry, I am not Indian.
- floren 4mo ago
  12L is 1.2 million

swiftcoder 4mo ago

> someone who was desperately trying to lose money before the end of the year Isn't donating to charity a lot easier than gambling on options? It's both legal and extremely easy to donate 5k to a tax-deductible charity of your choice...

nok22kon 4mo ago
donating would go against the American spirit of individualism where you only care about yourself. after all, who ever helped you for free, right?
- cwmoore 4mo ago
  Tax the bots for UBI.
ksbd-pls-finish 4mo ago
I assume a part of the point is gambling - you either lose exactly as much as you planned, or you "win big" and still come out ahead.
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Varcolacus 4mo ago

[flagged]

kmoser 4mo ago

> There are a number of ways someone could do this; one commonly suggested scheme was to buy put options that were expected to expire worthless, allowing the buyer to (probably) take a loss. > That means if an individual buying ACA insurance was going to earn $55k, they'd be better off reducing their income by $6440 and getting under the $48,560 subsidy ceiling than they are earning $55k. I am told by a CPA: In the US tax system, one is limited to deduct $3,000 of net capital loss against their otherwise taxable income. These put options would generate a capital loss. Therefore, this strategy would not accomplish the goal stated in the article.