The problem isn’t just all those other taxes but phasing-out of benefits—this is what leads to the calculations and observations by which somebody making $25,000/year isn’t much better off than someone getting $8,000/year.
I’m not very well informed on this topic, but isn’t something like that always going to be the case in a society with a safety net? e.g., if we make sure everyone has at least $25k to live on, anyone making $8k a year isn’t going to be any worse off than someone making $25k.
Of course I’m not sure how well America’s arcane maze of benefits, tax deductions and whatnot fit into this simple abstraction.
Safety net should be a slope, not a cliff. Earning your first dollar shouldn’t mean you get $1 less in benefits—there’s actually a good argument for subsidizing the first $X of income - which is what the EITC is. Basically negative income tax.
The problem isn’t just all those other taxes but phasing-out of benefits—this is what leads to the calculations and observations by which somebody making $25,000/year isn’t much better off than someone getting $8,000/year.
ADDED: Also, any paperwork can easily be an extreme barrier to that IQ 70 kid that Gwern was talking about.
It’s an extreme barrier (in the sense of an ugh-field) even for smart would-be employers.
I’m kind of worried that 20 people upvoted that any paperwork is an extreme barrier to smart employers—presumably people like themselves?
What kind of opportunities have you all been passing up for want of avoiding a form?
And what kind of opportunities are present to eliminate or stream-line such (ie, turbo-tax)?
I’m not very well informed on this topic, but isn’t something like that always going to be the case in a society with a safety net? e.g., if we make sure everyone has at least $25k to live on, anyone making $8k a year isn’t going to be any worse off than someone making $25k.
Of course I’m not sure how well America’s arcane maze of benefits, tax deductions and whatnot fit into this simple abstraction.
Safety net should be a slope, not a cliff. Earning your first dollar shouldn’t mean you get $1 less in benefits—there’s actually a good argument for subsidizing the first $X of income - which is what the EITC is. Basically negative income tax.