If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they&#x27;d do well.Though best to start local government first, obviously.We&#x27;re reaching breaking points in so many places...

They definitely should be. Some people might be in situations where asking your boss for a 10k pay cut gives them an extra $1k per year. Just dumb.

I like my cliff. I earn enough that I and my family are ineligible for most welfare schemes. I do not want even 6 cents worth of SNAP. I spent my entire childhood on that, and it disgusts me. Thus, were this policy ever seriously proposed, I would do what I can to dissuade my legislators from voting it into law.There are others like me, too, I am not unique.

They should be. And for the great majority of citizens, they should be calculated automatically along with taxes without the need for filing&#x2F;paperwork. But we must think of the Intuit shareholders and the harm that that would cause them.

This. No need for continuity in the derivative - the marginal tax rate should be fine to jump around - but should start low (I&#x27;m fine with negative) and increase as you earn more. Like US federal tax brackets, but with benefits also considered.

There is idea behind that, but continuous is not enough.The variable is all transfers, taxes and benefits T = [all taxes - all benefits] as function of income per person (including children). T starts negative (benefits are negative taxes).Goal: monotonously increasing effective marginal T rate.

Or, as it has always been, piecewise linear approximate it.

To calculate the amount of your childcare benefit take the negative of the your adjusted gross income (box 26a), divide it by 10,000, and add 2. Then take the arctan of that result and multiply by 5,000. Add 2500π and write the result in box 46. You may round the value of π to 2 digits. If you are filing as head of household, divide the amount in box 46 by the definite integral from 0 to your adjusted gross income (box 26a) divided by 10,000 of sin^2(x)&#x2F;(x^2 + 1) dx, and write that amount in box 48. If you are unable to find the function of the anti-derivative, IRS rules allow you to approximate with a Riemann sum using the midpoint rule and a rectangle width of 0.1.

&gt; The solution would simply be to stop making benefits decrease when salary goes up.That&#x27;s an option, and I&#x27;d be interested in how the math works especially with predictions of how the economy would respond.That said I don&#x27;t think not decreasing benefits is an important requirement. But net income (benefits + earned income - taxes) should be strictly increasing with earned income, and probably at a rate of at least 50% but ideally higher than that up to some reasonable definition of middle class income. It should never be the case that if you earn more you can end up worse off.

Actually, optimal taxation models tend to show that a base transfer at zero income with an initially &quot;high&quot; marginal rate for clawing back the transfer at the lowest end (but still no higher than 100%, and falling very quickly as earnings increase!) works very well. (Marginal rates then rise progressively for higher incomes, and paradoxically become lower again at the very top end, trending towards zero at the extreme top-end of the scale. This is actually a consistent result in non-linear incomes taxation models; the very top earner should face zero marginal tax on the very last cent she earns!)The intuition is that you only &quot;feel&quot; the high marginal rate if you earn very little, which impacts very few people; but the effect of making the break-even point more manageable with lower marginal rates for most earners is felt throughout the incomes scale. What really screws up things is higher-than-100% marginal rates, which are regrettably common in real-world systems amd completely useless.

I agree with you, but for what it’s worth I live somewhere top marginal rates are about 50% and indeed 32 hour weeks are very common. I think this is a good thing though.

Yes, looking at the net transfers makes more sense.However, net transfers aren&#x27;t a function of income alone. They depend on lots of factors, because they are plenty of benefits that depend on more than income and plenty of taxes like that, too. Eg capital gains taxes and property taxes and sales taxes and tariffs don&#x27;t depend on your income.

It&#x27;s not sufficient to make cliffs impossible, you just never want the effective marginal tax rate go above a certain threshold.It&#x27;s insane that we cap marginal tax rates for the wealthy below 50% “because they need incentives to work harder” yet the working class family is facing an effective marginal rate near 100% because of reduced benefits.The solution would simply be to stop making benefits decrease when salary goes up.“But it&#x27;s going to be insanely expensive” one may say, but it&#x27;s an accounting illusion. All we need to do to break the illusion would be to stop counting gross public spendings and taxes and instead count the net public spendings&#x2F;taxes for each individual (that is, over the whole population you take the difference between what they pay and what they receive and that gives you how much they contribute or how much they cost, instead of the current accounting system where we count people paying for their own benefits).What&#x27;s really expensive is the economic inefficiency of the current system.

I would guess that was not a joke. The benefits could drop all the way to 0 at a reasonable point unless you impose the stronger condition that the function be analytic.

You jest, but as an unemployed student I was approved for $6&#x2F;mo of SNAP.Like... for what possible purpose would the calculation even go that low? Just deny the application instead of wasting everyone&#x27;s time and resources. I have no idea how long they put $6 into the account. I never bothered to look.

Monotonic is what we have, and it allows cliffs.Suppose, e.g., that you can get $5k&#x2F;yr in benefits if you make less than $10k&#x2F;yr in other revenue and $0 otherwise. Unless you have a viable strategy for pushing past $15k&#x2F;yr it&#x27;s a strong financial disencentive against actually working, and even then your incremental ROI isn&#x27;t very good past that cliff (if it takes an extra hundred hours to push to $15.1k&#x2F;yr, then compared to your $10k&#x2F;yr option you&#x27;re only making $1&#x2F;hr for the extra work).

Why continuously differentiable and not just monotonic?

That can still have work disincentives; anywhere the magnitude of slope of the benefits is close to (or steeper than) the slope of the income as it phases out, then working more can get you no gain (or lose you money).

Continuously differentiable doesn&#x27;t mean your SNAP check couldn&#x27;t go to zero.

&gt; What happens if I receive money from the Government but in the same time I&#x27;m also actively opposed to said Government&#x27;s actions?Nothing? That&#x27;s how it&#x27;s worked in literally all functioning democracies. The purpose of any government, democratic or not, is to benefit its constituents. If it doesn&#x27;t do that, we have a moral obligation to destroy the tyrants. Those benefits range in their tangible value, from hard to quantify things, like establishing public expectations of behavior (laws), to easy to quantify (subsidies like wellfare, farming subsidies, etc).I&#x27;m truly baffled by your take that seems to insist that helping the needy somehow makes you moreso a slave to the government than the whole monopoly on legitimate use of force thing.

You are mixing up lots of different ideas.You can have net transfers to the poor without turning most of your country&#x27;s into net recipients.I also don&#x27;t understand why you assume that people who are net recipients would stop complaining or voicing their opinion? That&#x27;s not at all what happens in practice.

If you continue with the idea of transfers, which is, in effect, the current government buying off parts of its constituents, then &quot;democracy&quot;, whatever has remained of it in the West, will die for good. What happens if I receive money from the Government but in the same time I&#x27;m also actively opposed to said Government&#x27;s actions? Will I be allowed to speak against the Government that is, as a matter of fact, paying me? Will I have second thoughts of doing it? Will the Government cut off aid to me if I&#x27;m too vocal against said Government&#x27;s actions?All this to say that all we&#x27;re doing is turning most of our countries&#x27; citizens into de facto slaves, people with no political free-will and who are well-aware that if they were to speak out against the powers that be they risk destitution.

I can&#x27;t find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible).&quot;Yeah, I made $1M last year. Here&#x27;s my SNAP check for six cents.&quot;

I haved lived the majority of my life in working class communities (as an electrician). Despite sporadic eligibility, I&#x27;ve never applied for the benefits that many of my near poor neighbors receive (I am a simple homebody, with zero dependents).&gt;negative incentives for people receiving support, it doesn&#x27;t uplift and enable success, it keeps people trapped in poverty and a mindset of helplessness.For the majority of my recipient neighbors, I would disagree: [single] parent households simply are too expensive to operate without temporary community support.Conversely, I have a few childless neighbors that simply ride out &quot;disability&quot; payments while working cash jobs part-time, typically along the lines of handyman and&#x2F;or dealer. This bothers me.Few of my neighbors are incentivized to work harder (at least on paper), out of fear of losing healthcare&#x2F;housing&#x2F;dining benefits.Several of my wealthier clients had PPP loans &quot;pre-emptively forgiven,&quot; and pay my neighbors cash for housework, so I know all sides are gaming this system...----But it just seems so obvious that single-payer healthcare and subsidized childcare would solve most of society&#x27;s problems (much more simply than our current failures of welfare). These are the legitimate grievances of my working class neighborhood.

What &quot;current results&quot; are you referring to? No, people 50+ years ago weren&#x27;t arguing that cliffs can lead to disincentives, they were arguing that the whole system is &quot;socialism&quot; and bad - something that has been repeatedly disproven.There are few things more evil in our society than the breed of conservative that will talk about how their family needed social welfare growing up to survive, how it worked and they did survive, but how &quot;ashamed&quot; they feel so they thing we should tear everything down and remove the ladder now that they&#x27;ve climbed it.

Every employee is off welfare. Employment is very lucrative.

We all know that person on the left that struggles with reasoning that involves economic or statistical intuition, but has extremely strong instincts of right and wrong, and is quick to outrage and moral certainty, and low in curiosity.Their thinking is that poor people are poor, which is bad. So let&#x27;s check if they&#x27;re poor, and give them money so they&#x27;re not poor anymore, which is good. That feels right. Let&#x27;s do that.Negative income tax? But that gives rich people money too! Giving rich people money is bad because they&#x27;re rich already. QED.

&gt;probably not intentionalAll the current results were foretold by people screeching warnings about them 50+yr ago.&gt; deeper and more systemic.Nobody&#x27;s budget ever got bigger or headcount grew or government contract got more lucrative because people got off welfare.

&gt; because income requirements that cause people to fall of medicaid or SNAP completely are sharpHow often do pay increases perfectly keep someone in the gap? Presumably some of them will be large enough, through changes of jobs for example, that the family would completely jump that gap.&gt; because income requirements that cause people to fall of medicaid or SNAP completely are sharpWhy would it? This is perhaps intentional as well. Only allow the program to benefit half the country. I&#x27;m sure you can predict how that political split occurs and insulates politicians from the ballot box.&gt; It serves to have an underclass that politicians can dump on, it seems.It helps keeps wages suppressed. Politicians want money. They don&#x27;t care about &quot;dumping&quot; on you, they&#x27;ll make any excuse they need to keep the money coming in.

Maybe it&#x27;s just incompetence, bureaucratic morass etc but it really does feel like the system was designed to fail, and trap us into this false choice of a broken welfare system vs. no welfare at all.UBI and&#x2F;or UBS (universal basic services) would be so much better but there was a sustained propaganda campaign to tell people that free things are communism and therefore bad. Now Western countries are becoming ungovernable due to regulatory capture, tax evasion and industrial-scale manipulation of opinion by the elites, so fixing these problems within the current democratic system is an extremely uphill battle. At least Mamdani&#x27;s election gives us some hope in the US, but there&#x27;s only so much one city or even one country can do on its own without worldwide changes.

The decision to implement benefit cliffs is absolutely intentional, because income requirements that cause people to fall of medicaid or SNAP completely are sharp, and maybe 10 % of the population rely on those. Obamacare subsidies are phased out gradually, because half the country relies on Obamacare, and if there were issues around Obamacare, that would have repercussions at the ballot box.It serves to have an underclass that politicians can dump on, it seems.

&gt;I know it&#x27;s probably not intentional but I believe welfare in the US absolutely is rife with negative outcomes and negative incentives for people receiving support, it doesn&#x27;t uplift and enable success, it keeps people trapped in poverty and a mindset of helplessness.That&#x27;s the best way to ensure their vote in the next election for the welfare party.

&gt; Literally no one is immune to the character-destroying nature of entitlement programs.I personally know people who appear &#x27;immune&#x27;. I find the issue is trauma, not &#x27;character-destroying&#x27; - the uncertainty; the demoralizing nature; the experience living continually on a precipice, and seeing your kids, other dependants, and loved ones living that way. People are in a continual state of survival - of fight or flight, not of growth and health. Over a long term, that will injure anyone.You can see the privileged atmosphere of HN in the comments, mostly from people with no contact with US welfare programs. It&#x27;s like reading software development analysis from people who have no contact with that. (I have seen people on HN who do have experience, but they don&#x27;t seem to be commenting.)

Destroying the character of those administering the programs?

How does an executive such as yourself find empathy and compassion for people who did not simply lift themselves up by their bootstraps?

A considerable part of this is the fact that in a society where utilizing these programs is stigmatized to the degree that the USA does, people who see themselves as honest tend to avoid utilizing them.And even those who are less than honest, but have a sense of propriety, would understand that the correct, culturally approved time to engage in these activities is AFTER one acquires a significant amount of wealth, when entitlements are knighted to become &quot;economic incentives&quot;.

Were you somehow exposed to a random sampling of welfare recipients through your work?If no, how did you account for this sampling bias as you came to form your beliefs?

I used to think the welfare system had a few bad apples.Later, while working for a charity, I realized the truth.Literally no one is immune to the character-destroying nature of entitlement programs.

I remember reading this book called &#x27;The Losers&#x27; (<a href="https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;2114133.The_Losers" rel="nofollow">https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;2114133.The_Losers</a>) about a privileged man who has a car accident, becomes disabled and comes to rely on government support. The book looks at the lives of the working poor and actually poor, who rely on welfare cheques and other subsidies and highlights the social and psychological impacts of these systems of support. It was very disempowering and psychologically enslaving for the people living on these systems of support.I know it&#x27;s probably not intentional but I believe welfare in the US absolutely is rife with negative outcomes and negative incentives for people receiving support, it doesn&#x27;t uplift and enable success, it keeps people trapped in poverty and a mindset of helplessness.I come from Australia where the social welfare system has similarly degraded (Though not as bad as the US), and there are increasingly more dehumanizing aspects in engaging with the system just to receive a below-subsistence amount.This article highlights one aspect of such disincentives, but I believe the problem is deeper and more systemic.

This doesn&#x27;t surprise me at all. On top of lack of funding, you have:1. Benefits don&#x27;t come into effect fast enough to matter for emergencies. Even with expedited processing you can have to wait a week for food.2. The bureaucratic requirements aren&#x27;t obvious if you&#x27;re new to the system. How many people know that &quot;expedited&quot; processing exists? How many people know that they qualify?3. The bureaucratic requirements aren&#x27;t exactly painless. It&#x27;s been awhile, but I remember one was as simple as &quot;show up at our office for &lt;xyz&gt; reason.&quot; That&#x27;s easy if you have a car or money or friends or whatever, but a 10-mile hike each way in -20F weather is never fun, and I&#x27;ve gotten in trouble more than once when hyper-local weather patterns (e.g., too close to a body of water with a long straight stretch) made the situation much more dangerous than I was equipped for.And so on. The system is (supposedly) easy to use if you know its ins and outs, but if you&#x27;re struggling and never anticipated being in that situation then you&#x27;re mostly just fucked.

&gt; and just 24 percent of those eligible receive Section 8 housing vouchersThere are definitely problems with the distribution of these programs, but it’s also a mistake to think that everyone eligible for every program wants to collect every benefit. The housing vouchers are a good example of something that isn’t applicable to a lot of people who, for example, are living with relatives. I have some people in my extended family who fit this description right now. They have housing in a beneficial family situation, so any housing benefits they qualify for aren’t relevant to their current situation.Not to minimize the problems, but the number of people who should be or want to be receiving every benefit isn’t 100% minus the number of people currently receiving it

&gt; In practice, however, several of the programs that seem to offer the most generous benefits are severely underfunded, so relatively few families are actually able to obtain them. For example, according to congressional testimony from the Center on Budget and Policy Priorities, 68 percent of poor families with children received Aid to Families with Dependent Children in 1996. By 2015, after the welfare reforms of the Clinton era, benefits from TANF, which replaced AFDC, reached just 23 percent of poor families with children, according to the same source. Similarly, just 8 to 12 percent of eligible families receive child care benefits from the CCDF, and just 24 percent of those eligible receive Section 8 housing vouchers.This is complete insanity.

3. has always bothered me - if you run a McDonalds, you have to pay market price for the building, kitchen equipment, both when buying and maintaining it. If you don&#x27;t pay enough to maintain the fridge, it won&#x27;t unionize - it will break down.The idea proposed by these &#x27;free market types&#x27;, that somehow people working there below sustenance salaries &#x27;deserve it&#x27; - that the cost of labor needs to be essentially subsidized just doesn&#x27;t make sense to me.Practice what you preach - either pay the wages people need to get by, or close down.

The system in its current insane state serves the purposes of multiple groups of people:1. The bureaucrats administering the system because the more complex and insan the system is, the more bureaucrats you need.2. The politicians who can promise $X of benefits to N people while knowing all along that due to the complexity of the system the actual cost of the program will be well under X*N due to failure to claim the benefits.3. Companies that can now hire workers for less than their cost of living because they know they can just make it up out of government benefits.And it hurts, of course, the poor people who depend on these programs. But that doesn&#x27;t matter politically, because these people are mostly not smart enough to even figure out how they are being screwed. Whereas the people in 1-3 above are absolutely smart enough to figure out how they benefit from the current system and they vote and donate accordingly.

So UBI + universal healthcare? Sign me up!

I always felt simplifying all this, it would probably be possible to consolidate and offer proper health care, and a real welfare, along with a supplemental program for those inapt to work, with it all costing less than the mountain of piled complexity and paper work that we have today.

<a href="https:&#x2F;&#x2F;www.niskanencenter.org&#x2F;wp-content&#x2F;uploads&#x2F;2021&#x2F;01&#x2F;working_parent-960x400.png" rel="nofollow">https:&#x2F;&#x2F;www.niskanencenter.org&#x2F;wp-content&#x2F;uploads&#x2F;2021&#x2F;01&#x2F;wo...</a>On the website there is cropping and it might be displaying differently on different browsers. I was able to recognize it as an adult at the computer holding a baby on their lap. I do not see any intent to show a baby working.

I think it’s amusing. That was probably the expected response.

I cannot express the extent to which that picture at the top of the article with a baby “working” at a laptop upsets me.I can see the beginnings of a hand of an adult at the bottom, but there is something so on the nose about such an image that it prompted a visceral response.

It looks like in practice the most generous of these programs are not accessible to most working poor, so the charts here are more theoretical than practical. It also doesn&#x27;t address income tax-free earnings (traditional 401k and IRA) - it seems like those generally don&#x27;t count against your eligibility for programs and could shelter ~25k or more for the self-employed. Not that I imagine most people actually near poverty are maxing out their retirement accounts, even if it theoretically costs them nothing or even gains them value.

I appreciate your willingness to keep trying to communicate your experiences. It&#x27;s obviously a huge spectrum of possible lived experiences and incredibly hard to legislate in a way that does the best for everyone. Do you think having a trained case worker evaluate each person&#x27;s circumstances and coming up with a pathway to success makes some sense?I think it totally could for people in just the right position and timing, but I also feel like for many it would be advice and help that could end up unreceived.

I guess it really is too broad of a sector to think of any clear cut solutions. I&#x27;ll tap out, but my main shtick is the poverty programming but. I think k that perpetuates.I would agree with housing first. Definitely something that goes a long way. But it&#x27;s also not clear cut (IE: too many recovering drug addicts in the same neighbourhood will bring each other down..)While some people might only be on welfare temporarily, others are long term. And removing it drops the &quot;floor&quot; for everyone at once. Having seen death and evil that happens in poor.. families, societies, etc.. I don&#x27;t mind the idea of letting certain elements die.I&#x27;ll keep the tactical victim hood, it&#x27;s the only way I get positive responses that takes me on good faith. Otherwise I&#x27;m just a &quot;corporate bootlicker who doesn&#x27;t know anything&quot; or &quot;privileged male(?) with typical survivorship bias&quot;-- I gotta get that out of the way first, this is my learned behaviour. I&#x27;m counter-programmed. Hate the game not the player.

How would that be implemented on an individual basis? Force drug-induced psychosis (obviously not)? Just kick people off of support? That will have obvious, very bad downsides. And then we&#x27;ll have a bigger problem with homelessness (which will get the same response).While I don&#x27;t downplay your experience; do you know of research that talks about it? The idea that people need incentives is an old one - Bill Clinton&#x27;s welfare reform talked about &#x27;a hand up, not a hand out&#x27;, etc. I also remember research, though I don&#x27;t know how current, that most people in welfare programs are there temporarily - they are in and out, not there on a long-term basis.What about people who aren&#x27;t going to make it on their own? Do we just let them die? A similar problem is people addicted to drugs: There is no reliable solution; rehab only works for some, not always permanently, and forcing people into it is almost certain failure (besides being a serious violation of their freedom).There is research and experience saying &#x27;housing first&#x27; - providing housing, which provides stability and much better access to services - helps significantly, but that may be focused on people lacking shelter.P.S. I hope you drop the whining about downvoting. It&#x27;s against guidelines and is tactical victimhood.

I usually get downvoted on any of my commentary on poverty or welfare, despite my lived and continued experience in it, but I&#x27;ll punt again.My family, from grandparents downwards (siblings, aunts, uncles, cousins, across 3 family lines) have all relied on government handouts for a majority of their lives, and had their character destroyed by the system. All rely on a meager amount of welfare to stay alive, not healthy, not productive. Just kicking along and in alcohol and drugs just to feel something. Most have died of some form of cancer from their vices.I joke (with a semi serious tone) that my drug-induced psychosis was the best thing for me because it broke me out of the system (tied in with a move interstate) - I lost all my old friends, family was quasi-cautious of me, and I was in a new town and had to completely rebuild myself. I had a mental health nurse nurture me &quot;back on my feet&quot; within 6 months and it was the first time I was actually on my feet since birth.Governments and society, in the large part, think &quot;something is better than nothing&quot; - but I think it&#x27;s actually the opposite. Maintaining a status quo is what makes people &quot;comfortable in misery&quot; and not have any way out. Most can&#x27;t even get a job, because the job (which might be temporary) knocks out the welfare (which is permanent, as long as they don&#x27;t get a job).I would love to see modelling or examples on my theory of the way out of this mess: reinvest the welfare system as mental health services, only give welfare to those who are in the mental health service. Incentivise for how many people transition out of the welfare system. keep it at the same dollar amount, just reallocate that money to the people who really need it.Some cases are almost too tragic to mention and there&#x27;s no positive outcome; others have &quot;learned&quot; behavior and can come out of it with some help (or sometimes just some positive messaging)I also largely blame a lot of societal&#x2F;government programming. I call it &quot;poverty programming&quot; -- the idea that people cannot do ANYTHING without help. You absolutely will not make it on your own, you NEED support you NEED this label, medication, service, benefit.I strive to message the opposite: you can do it, release the chains. the world is not that scary. embrace the chaos, there is a lovely world out there ready to be explored.

having been out of work before and going on benefits the cliffs are hilariously badly calculated, not even sure how they are determined. for someone who knows their potentially salary far outweighs the reduced subsidies it can be a needed life boat. for people at the cutoff it incentivises you to stay under it.

Almost as if it was designed this way on purpose

The real issue isn’t just the cliffs themselves — it’s that our welfare system is a set of disconnected programs that interact like poorly designed APIs. For people with zero margin for error, even a small income change can trigger huge losses in healthcare, childcare, or housing.We ended up with a system that’s expensive, complicated, and psychologically brutal — and still fails to do what it was designed to do.