| ▲ | dgoldstein0 3 days ago | |
Yeah I agree, it sounds like a misunderstanding. I'll go further and say what we probably want is for the derivative of net income as a function of earned income to be monotonic increasing but max out less than 1. So that there aren't ranges of income where you are receiving very little per dollar earned and then after some point start receiving more per dollar. But solving benefit cliffs really just means having earned=>net income strictly increasing with the marginal rate reasonable, say at least 30 cents more net income per earned income. Under that constraint, you could have ranged where net income grows slower until you hit some higher dollar amount of earnings, but imo that should also not be desirable. | ||
| ▲ | eru 3 days ago | parent [-] | |
I mostly agree. However that's all a gross simplification, because there are plenty of taxes and benefits that aren't just a function of income. Eg property taxes or capital gains taxes don't depend on your income at all. | ||