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The Dead Zone: The Implicit Marginal Tax Rate
- rw 17y ago> "Actually, this being a democracy, there is nobody to blame but the electorate. Especially the left-liberal do-gooders." ...
- DenisM 17y agoHe's still got a valid point - negative incentives to work are undeniable.
- camccann 17y agoUnfortunately, his point would be stronger if he had made it more in terms of a practical problem to be solved, not as an excuse to get in shots against The Evil Other Guys. Partisan feuding is for people who want political power, not solutions.
- DenisM 17y agoOr who are simply bitter. But yes, it would be better. The actual income tax is progressive yet it is continuous so you never have to ask your boss to lower you salary by $2 in order to save $20 on taxes.
- cabalamat 17y agoLike the "left-liberal do-gooders" who were in power up to January 2009? The article makes some very valid points, but trying to put all the blame on the writer's political opponents is silly. I would be very surprised if both the Republican and Democratic parties don't share the responsibility. Incidently, exactly the same effect occurs in the UK, and has done for decades under both Labour and Conservative governments.
- speby 17y agoThe same negative incentives to work are also, incidentally, not exactly "noticeable" to the general public. It is not as if people go around wearing signs around their neck indicating which government-subsidized programs they are eligible for. Imagine, for the moment, if they did.
- bokonist 17y agoThese numbers are really disturbing. I think something like Charles Murray's "The Plan" ( http://www.amazon.com/Our-Hands-Replace-Welfare-State/dp/0844742236 http://www.amazon.com/Our-Hands-Replace-Welfare-State/dp/084... ) where each citizen just recieves a $10,000 check every year has a lot of merit. The poor are still helped, but it eliminates the disincentives to do work. Since it's just shuffling dollars, it also minimizes the amount of money lost in the bureaucracy. Another idea is to turn the U.S. government into a joint stock corporation and simply give every citizen dividend paying shares. That way the pie is divided equally, once and for all, and then government can simply concentrate on growing the pie.
- netcan 17y agoEconomic critics tend to present things as 'Here. This is simple. Policy makers are sooo stupid that they haven't noticed.' While the current policy may be wrong, this issue exists because the problem is hard. Subsidies & assistance for the poor create perverse incentives. That is true. But they are there for a reason. Most people consider it morally important. We have two things we need to do that conflict with each other. How do we subsidise to a minimal level without destroying incentive to work? It's not an easy question to answer. Creating an incentive that puts more people in employment but also more people onto the street is not a solution, at least no to the problem as it is implied.
- bokonist 17y agoWhile the current policy may be wrong, this issue exists because the issue is hard. You make it sound as if the policy makers are talented engineers who made the design decision because it was the best compromise on how to deal with the various trade-offs. That's simply not the case. In reality, these welfare policies are a result of a chaotic process of various factions battling to get their hands on dollars. This process is not designed, and the welfare law has simply evolved into a giant mess over the course of many decades. That said, politicians and policymakers are not idiots. They are simply controlled by events larger then themselves. It's the incentives of the political system that are at fault. ( See Government's End by Jonathan Rauch ) How do we subsidise to a minimal level without destroying incentive to work? It's not an easy question to answer. Roll up all the welfare programs into one program - give every American over 21 a check for $10k a year. For people without a job, give a guaranteed government job for $6 an hour. For people who need hands on help, go back to relying on local charities and local government aid. They are closer to the problem and have the right incentives to actually fix things (and empirically, the local welfare systems of the late 1800's worked far, far better than our national system today).
- camccann 17y agoFor people without a job, give a guaranteed government job for $6 an hour. This sounds good but in practice would probably be a bad idea, for multiple reasons. The main problem is that government work programs would (by necessity) have to involve jobs that almost anyone is capable of performing, with minimal oversight required. This would be very susceptible to gradually becoming pointless busy-work, variations on the "one person digs a hole, next person fills it back in" pattern. The net result would likely be money spent wasting people's time to do work that creates no value. The ideal goal is to get people into jobs where they're actually creating value, and spending time doing a useless "job" is actually counterproductive because it's time they can't be spending to gain skills or look for other work. We'd be better off paying people $6/hr to get training in a marketable skill, or to search for work matching skills they already have.
- jaiwithani 17y agoEverytime someone takes the Austrian School seriously, God denies health care to a kitten. Please, think of the kittens.
- netcan 17y agoI have a lot of respect for the Austrian school, particularly Hayek. But, the tendency of its supporters to see Economics as a philosophy & to defer to things like 'the law of unintended consequences' is insufferable.
- camccann 17y agoI have a hard time taking seriously any school of thought that's explicitly anti-empirical. This is the 21st century, have we learned nothing from the scientific revolution?
- netcan 17y agoI wouldn't call Austrians anti empirical. Many modern Austrian schoolers are scholars of economic history. Also, economics, specifically macro is very hard to study empirically. I would call them hard headed Personally, I would argue that economists see themselves too much as scientists, not too little. I would prefer they place themselves closer to sociology, political science & farther from biology & chemistry. Less deference to abstract first principles.
- bokonist 17y agoIt's not anti-empirical at all. It's just anti-numerology and against using induction when induction cannot be done. Compare Rothbard's history of the Great Depression ( http://mises.org/rothbard/agd.pdf http://mises.org/rothbard/agd.pdf ) to the typical paper by a Harvard economist ( http://www.economics.harvard.edu/faculty http://www.economics.harvard.edu/faculty ). Frankly, if you consider the Harvard papers to be more empirical, please inform me what form of crack you smoke, as it must be very high grade.
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- tptacek 17y agomises.org is to Austrian-school libertarians what Redstate is to conservative Republicans. Make your own call about whether we ever want posts from here on Hacker News, or posts that include the words "left-liberal do-gooders". I made my choice, and flagged this.
- camccann 17y agoA pity, because the article makes an interesting point otherwise, when not drifting into deranged partisan territory.
- jamesbritt 17y agoI'd rather choices be made per article, and not avoided because of a domain name. Likewise with choice of phrasing. I'd be almost happy to block every article that used the words "awesome" or "douchebag" (and variants), but I realize that's an awfully blunt ax to wield. Is there a term for besmirching an article because of the domain and not the content? I suggest ad domaininem, analogous to ad hominem. (Latin scholars, please correct me here ...)
- tptacek 17y agoIt'd probably be ad principatum. (-em is the accusative of hominis, the stem of which is "homin").