It seems mostly correct to accept the new calculations in the Improved COTI, which represent a −25% adjustment, and then include the 13% adjustment for taxes, resulting in about a −13% adjustment. This still represents an increase in the cost of thriving.
is COTI actually an inverted measure of the literal “cost of thriving”? i.e. the index goes up when the cost goes down? otherwise, this apparent inverted sign (a −13% change in COTI representing an “increase in the cost of thriving”) is throwing me for a loop.
In broad terms, families with children have seen large reductions in their federal income tax burden, largely due to the introduction and expansion of the child tax credit.
If we want to measure the COTI, as per its original justification, it seems correct to more or less accept the ‘improved COTI’ of −25% instead of −36%, reflecting the errors in health care premiums and college sticker versus effective prices, and various minor fixes. We then must take taxes into account, which should leave us with about a −13% change from 1985 to 2023.
here it happens again: tax costs have decreased since 1985, but somehow that manifests as an increase to the “cost of thriving” index (-25% —> −13%).
is COTI actually an inverted measure of the literal “cost of thriving”? i.e. the index goes up when the cost goes down? otherwise, this apparent inverted sign (a −13% change in COTI representing an “increase in the cost of thriving”) is throwing me for a loop.
here it happens again: tax costs have decreased since 1985, but somehow that manifests as an increase to the “cost of thriving” index (-25% —> −13%).
Yeah, it’s inverted versus what the name implies, it’s amount of thriving you can get per hour of work.