Suspicious Discontinuities

Re:Suspicious Discontinuities by FabHK on Friday February 21, 2020 @07:53AM (#22382706)

Dylan, just note that the problem as originally posed is not solvable. Your „solution“ is one that violates one of the constraints and then says „but it’s minimal“. Sure. But that was exactly the point of the comment above: by the nature of things, any change you make leads to an undesirable consequence. Either people who need the benefits don’t get them, or the „marginal tax rate“ is very high, or you extend the benefits to more people (which is costly). You’re stuck on the horns of a trilemma, and that’s the solution the UK has chosen, and any „improvement“ you suggest will be worse on at least one of the dimensions.

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Re:Suspicious Discontinuities by Dylan16807 on Friday February 21, 2020 @03:58PM (#22386656)

> Dylan, just note that the problem as originally posed is not solvable.

The original constraint was not a $0 increase. I did not violate the original constraint.

And even if you did take it to be $0, it said you can't "just afford to" increase. Proposing a tax to make up the difference meets that critera.

But even inside a hard "no more spending" constraint, it's not nearly as unsolvable as you make it out to be. It's quite possible that giving less money to people mildly below the old cliff edge, while giving more money to people mildly above it, is a net positive. That doesn't screw over people at the bottom, and it doesn't increase total cost.

Going from a hard cliff to a 90% marginal rate was obviously better, right? And going from 90% marginal rate to 85% was obviously better, right? They decided to stop at 63%. It doesn't mean that going further is a priori wrong.

And on top of all of that, smoothing out the curve to 50% very likely motivates more people in the range to work, reducing the amount of benefits they use.

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