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While this is interesting, I'm not sure what point we should really be taking away from it. That government assistance is so good it's a motivator not to work?

While this is interesting, I'm not sure what point we should really be taking away from it. That government assistance is so good it's a motivator not to work? It's easy to play with numbers and make it look like you're "losing money" by working, but it's somewhat disingenuous. For instance, in practice that "$30K of incremental work" is statistically very likely to involve a job with a company that provides health care for their employees and dependents. Furthermore, your description of the way food stamps work is correct but elides how that "phase out" works. Under current CalFresh guidelines[1], a household of 4 grossing $30K a year would get $98 a month. If they grossed $24K a year that would go up to $218 a month -- an extra $1440 a year, when you work it out, which is to say much less than what they'd net by just making another $6000 a year. [1]: http://foodstampguide.org/calculating-the-grant-how-much-do-you-get/ http://foodstampguide.org/calculating-the-grant-how-much-do-... In practice, I'd suggest that most of these calculations are going to work out in roughly the same way: yes, you're "losing out" on government assistance by making more money, but the benefits you accrue from actually making more money more than offset that.

zaroth 12y ago
chipotle_coyote, you give the perfect example (actually it's close to the worst case part of the curve). A family of 4 making $24k/year, working their ass off to increase their income 25% to $30k/year. But at the end of the year, what happened? Gross Increase in Income: $6,000 - FICA: ($ 918) - Fed Income Tax: ($ 900) - State Income Tax: ($ 500) - Reduced Food Stamps: ($1,440) - Reduced EITC: ($1,260) [21% phase out after $23,260] - Reduced ACA: ($ ???) [Just about to lose Medi-Cal] That's just top of my head. There are other programs I'm definitely forgetting or don't know about. There's at least $5,000 of additional taxes you pay, and credits you lose, for earning that $6,000. If I had all the numbers, I'm sure said hypothetical family is worse off earning the extra $6,000. They literally now have less money to spend on food every week. Think about how broken this is. At the point in the curve where adding $6,000 in family income could actually be life-changing, the government claws back at least 83% of it?! Fucking A... (sorry, this really makes me mad). > "$30K of incremental work" is statistically very likely to involve a job with a company that provides health care I count benefits as part of income. So if part of the increased payroll expense is actually spent by the employer paying for a private health plan (with a high deductible and cost sharing with the employee) that's a huge net-loss for the family versus getting cash income from the employer and keeping their free health care from Medi-Cal. (It makes zero difference to the employer, ACA penalties aside, either way it's a fully deductible business expense) Edit: I see you gave two examples, $24k vs $30k, and lets say $30k vs $60k. If we do a detailed realistic budget accounting for all costs, credits, programs, etc. you will find "earning $60k" you actually have less money to spend than "earning $30k". You will be net-negative if you have any significant health care expenses at all. It's completely counter-intuitive, and in fact, borderline insane.
- chipotle_coyote 12y ago
  > I count benefits as part of income. While there's a case to be made for that, it's not what most people do -- and it's not what you do for computing benefit eligibility for food stamps, ACA, and other government programs, AFAIK. So I'm not sure you should count benefits as income for this purpose. In principle you're right re: getting cash income instead, but in practice, I'm not sure it's that clearcut. Re: taxes vs. credits, it would be really interesting to actually work that out. I'm not convinced your take is right, but I'm not convinced my take is right, either. :) I didn't intentionally pick the perfect example; the $24K a year came from typing "2000" into the spreadsheet I downloaded from the CalFresh web site because "3000" was too high to qualify. I didn't actually try any numbers other than 2000 and 2500. But my suspicion remains that most people would be better off actually working than taking assistance programs, both in purely pragmatic terms and in less quantifiable terms -- I've known a fair number of people who make assistance-qualifying incomes but I haven't known a single one who wants to be in that position. (Which is of course anecdotal, but it's still interesting to me.) (Also, I don't think you can really count every possible credit -- most people can't qualify for disability income, for instance. And the observation I made about not wanting to be in that position is extremely relevant here; I've known a couple people who get permanent disability income and they absolutely do not consider it a good thing. They're making less than they were when they could actually get employment, and that's not getting into unquantifiable but real things like damage to their self-esteem.)

zaroth 12y ago

chipotle_coyote, you give the perfect example (actually it's close to the worst case part of the curve). A family of 4 making $24k/year, working their ass off to increase their income 25% to $30k/year. But at the end of the year, what happened? Gross Increase in Income: $6,000 - FICA: ($ 918) - Fed Income Tax: ($ 900) - State Income Tax: ($ 500) - Reduced Food Stamps: ($1,440) - Reduced EITC: ($1,260) [21% phase out after $23,260] - Reduced ACA: ($ ???) [Just about to lose Medi-Cal] That's just top of my head. There are other programs I'm definitely forgetting or don't know about. There's at least $5,000 of additional taxes you pay, and credits you lose, for earning that $6,000. If I had all the numbers, I'm sure said hypothetical family is worse off earning the extra $6,000. They literally now have less money to spend on food every week. Think about how broken this is. At the point in the curve where adding $6,000 in family income could actually be life-changing, the government claws back at least 83% of it?! Fucking A... (sorry, this really makes me mad). > "$30K of incremental work" is statistically very likely to involve a job with a company that provides health care I count benefits as part of income. So if part of the increased payroll expense is actually spent by the employer paying for a private health plan (with a high deductible and cost sharing with the employee) that's a huge net-loss for the family versus getting cash income from the employer and keeping their free health care from Medi-Cal. (It makes zero difference to the employer, ACA penalties aside, either way it's a fully deductible business expense) Edit: I see you gave two examples, $24k vs $30k, and lets say $30k vs $60k. If we do a detailed realistic budget accounting for all costs, credits, programs, etc. you will find "earning $60k" you actually have less money to spend than "earning $30k". You will be net-negative if you have any significant health care expenses at all. It's completely counter-intuitive, and in fact, borderline insane.

chipotle_coyote 12y ago
> I count benefits as part of income. While there's a case to be made for that, it's not what most people do -- and it's not what you do for computing benefit eligibility for food stamps, ACA, and other government programs, AFAIK. So I'm not sure you should count benefits as income for this purpose. In principle you're right re: getting cash income instead, but in practice, I'm not sure it's that clearcut. Re: taxes vs. credits, it would be really interesting to actually work that out. I'm not convinced your take is right, but I'm not convinced my take is right, either. :) I didn't intentionally pick the perfect example; the $24K a year came from typing "2000" into the spreadsheet I downloaded from the CalFresh web site because "3000" was too high to qualify. I didn't actually try any numbers other than 2000 and 2500. But my suspicion remains that most people would be better off actually working than taking assistance programs, both in purely pragmatic terms and in less quantifiable terms -- I've known a fair number of people who make assistance-qualifying incomes but I haven't known a single one who wants to be in that position. (Which is of course anecdotal, but it's still interesting to me.) (Also, I don't think you can really count every possible credit -- most people can't qualify for disability income, for instance. And the observation I made about not wanting to be in that position is extremely relevant here; I've known a couple people who get permanent disability income and they absolutely do not consider it a good thing. They're making less than they were when they could actually get employment, and that's not getting into unquantifiable but real things like damage to their self-esteem.)