Re:Suspicious Discontinuities
by crooked-v on Friday February 21, 2020 @12:06AM
(#22381062)
With this system you're guaranteed to never end up with less total money than you started with by getting a better-paying job, which makes it definitionally not a cliff. It's just a gradual reduction in benefits as you earn more.
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It’s not a cliff and sounds like a step in the right direction, but it’s still effectively a 63%+whatever marginal tax rate.
I can’t remember the exact benefit numbers (they might overlap with National Insurance) but you don’t pay income tax until you’re earning over £11,000 so you shouldn’t pay marginal tax while on benefits.
Losing benefits as you make more money has the same effect as being taxed on that marginal income.