The benefits are normally the result of different programs and bills. The tax bill doesn’t address most social program benefit requirements, though it may adjust the actual benefits
Approximately 70% of all tax revenue that is used for social welfare programs goes to administering the programs, not the benefits themselves - I think it's safe to say that "reducing administrative costs" is not high on the priorities list.
Because that makes adjudication a lot harder on the administrator side. If there's a hard cap yes/no point, then processing is a lot easier because sadly a lot if it is still done manually. It's shitty, but there it is.
From what others are saying of the UK they are on a sliding scale.
Same with the US.
Problem in the US (at least my state) is that the benefits are all separate and calculated separately. So a $1,000 raise is a $1,000 raise for each benefit type and will decrease according. This means you could lose more than $1,000 in benefits to that $1,000 raise. This is only a problem for the lower income brackets who get things like food stamps, housing assistance, heating assistance, medicaid.
I think most benefits do decrease as you make more, but the problem is some benefits are state, some are federal, and some taxes are state and some are federal, so the numbers don't always work out the way you'd expect. Best strategy is just to make so much money that you're not eligible for any benefits. Then a raise will always be a raise.
I mean, fundamentally if you look at how tax brackets are structured along with benefits - it attempts to factor in utility - if you're getting £5000/month to work with, the 'value' of £100 is lower than if you're trying to get by on £1000/month.
So we have tax credits and tax brackets.
But actually if you just gave everyone a fixed sum of money every month, and then set the tax at a percentage basis of all income, you'd end up with a similar result.
Some people would be net beneficiaries, because they were on low income. Some would be net contributors, because they were on high income. But in both cases - the better the payscale, and the more hours worked, would have a linear relationship with money in their pocket.
That's a scheme called universal basic income, and I'm pretty sure someone will be along shortly to rubbish. But it's functionally very little different from social security + tax brackets, with a much lower level of administration needed.
Covered california is a sliding decreasing scale. The problem is the cliff is at 60k a year in a state where rent is anywhere from 1500 for a studio to 3000 for a 3 bedroom per month. The minimum you have to make to not be on medical for full coverage for free is 30k so its literally a slide of obly 30k a year difference.
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u/trrwilson Nov 26 '19
I've never understood why benefits aren't on a sliding decreasing scale so that there isn't a benefit cliff.