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Comment by nullish_signal | Hacker News Reader

Agreed, "Welfare Cliffs" seem extremely suspect. It seems ideal if all Welfare were based on Gradient scales, where earning $10K more would ease off benefits, by like -$20 Welfare per +$100 Earned

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This is absolutely sensible and also impossible for the patchwork of systems that an individual has to navigate. These systems would have to talk to eachother, and they don’t.

That’s why I’m in favor of a straight cash subsidy through the negative income tax.

It doesn’t need to be so complicated. Make it so that there is a target benefit. Every dollar of real earnings subtracts one dollar of assistance. Maintains the incentive to continually earn more where possible.

Can you clarify? What you propose sounds to me like a huge disincentive to work.

If you’re receiving $1234/month (typical disability payment from a few years ago), that works out to $14808 annually. Under your scheme, you’d have to find (and work) a job paying $14809/year just to see an increase of $1 in your real income. In effect, you’d be working for a full year and being paid a net of $1.

Well, it is predicated on the idea that more money is always better. Most of the assistance programs provide enough to stay alive with limited funds for anything else. Presumably, any job worth working is going to offer compensation significantly better than remaining idle and collecting checks. That is, in the provided pathological example, I would suggest the worker not take that job opportunity.

It is more about ensuring that a person receiving assistance can work as much as they are able without any concerns. Anything less than a totally smooth off-ramp to financial assistance is bound to create scenarios where the optimal strategy for a worker is limit their maximum compensation below the arbitrary financial cliff.

There's another issue though: people on disability payments often have disabilities that prevent them from working full-time. So in order for them to climb over the financial cliff they've got to find a part-time job that pays a lot more than what they receive from the government. That's a much more difficult obstacle and it keeps people from otherwise taking a low-paying, non-physically-taxing part-time job to earn a bit of extra income. It makes no economic sense.

>So in order for them to climb over the financial cliff they've got to find a part-time job that pays a lot more than what they receive from the government. >that pays a lot more The ideal is, without "Welfare Cliffs", they could find work that pays a BIT more, and lose a SLIVER of welfare, thus making the effort still worth it.

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