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Re:OpenResearch Unconditional Cash Study's first findings av... by AnthonyMouse on Wednesday July 24, 2024 @05:51AM (#41055314)
> True, but this is less of a problem if the credit rate is comparable to the payroll tax rate. In that case, a worker who over-reports their income will create an obvious payroll-tax debt in the hands of the notional employer.

But that's just an accounting sham to claim you're taxing them less than you are and you no longer actually have a negative marginal tax rate.

> However, per the article here, the unconditional cash transfer seemed to lead to reduced labour income. That's an obviously worrisome sign

Well that's mainly because they worked 1.3 fewer hours a week and were less desperate to take a low-quality job.

You might also notice that the effect you're referring to isn't net of the payments, and is also probably invalidated by the period the study was done -- it started during COVID. Between the first and last year of the study, the household income for the control group increased by $20,000 -- on a $30,000 base! The experiment group increased by almost as much before the payments and were ahead by more than $6000/year including them.

In any event, you don't have to use a different rate structure to do what you suggest, you get the same effect without the complexity by increasing the flat tax rate and adding the money to the UBI.

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