[maxrecursion]

The main political realization I had with growing up lower class, still live in poorer areas, and making it to being high income is that basing government programs around income is terrible policy.

1. It's extremely unfair

2. It punishes those working to get ahead

3. It creates 'welfare cliffs' where people become worse off for getting jobs. Losing Medicaid is the best example of this.

4. It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..

It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.

[lupire]

What we learned from COVID is that it's absolutely disastrous to send everyone a check, because most of that money gets stolen. Better to give away resources that are valuable to consume but expensive to transact in.

And what we learned from taxing high earners is that the highest earners hide their money and don't pay the expected taxes.

[maxrecursion]

The money that was stolen wasn't sent to everyone. You can't steal money sent to everyone. It was the PPP 'Paycheck Protection Program' money that was stolen where tons of small businesses filed to get that money when it wasn't needed. That's not the same thing at all as putting money in the same bank accounts that file tax returns, which is the example I was providing.

[lupire]

CA tried something very close to that

https://www.npr.org/2022/10/18/1128561539/pandemic-fraud-bil...

https://edd.ca.gov/en/about_edd/fraud-response/

[diego_sandoval]

> because most of that money gets stolen.

Huh? I'm out of the loop on this.

[hypothesis]

Not OP, but here is some data:

“We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.”

https://www.sba.gov/document/report-23-09-covid-19-pandemic-...

IRS also covered some:

https://www.irs.gov/newsroom/irs-criminal-investigation-rele...

[chii]

a program administered with poor oversight (may be due to time constraints or whatever reason) doesn't make that program a poor policy decision.

I think means tested welfare can backfire a lot in ways that locks people into dependency on the welfare and not look for a higher paying job.

[wakawaka28]

I don't remember all that well but I think there aren't really sharp welfare cliffs with financial aid. The expected contribution of you and your family is subtracted from the total cost, and you are eligible for aid to pay the rest. The money you get from working is supposed to be more than your financial aid deduction anyway. So say if you made an extra $10k, it ought to reduce your financial aid by less than that.

>It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc..

We already have a system for that. It's called the IRS. The cost of a basic fraud detection system is less than the actual fraud would be of course. They have to worry about things like people enrolling and never going to class.

>It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.

It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help. The average wagie is not going to seriously be disincentivized from working a meaningful way because it might disqualify their kid from certain financial aid. The whole point of financial aid is to give hope to the hopeless and help the struggling, not give everyone benefits whether they need it or not. Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.

[maxrecursion]

Healthcare is the easiest example. A birth of a child could easily cost 10k with health insurance, and that is only if there aren't complications, it's free with medicare. 10K is a pretty massive cliff.

If you have a large family losing Medicaid is easily thousands of dollars added to your new budget, and that's just counting out of pocket costs towards the massive deductible most healthcare care plans have now. You add the premium costs it is an obscenely a lot more money you are paying for what is free if with medicare

[wakawaka28]

Hot take: If you can't afford insurance you shouldn't be having a dozen kids, or at least shouldn't complain when others don't want to subsidize that. But $10k per kid for an average of 2 kids in a lifetime does not exactly make for a huge cliff. The income limit for Medicaid is so low in most places, getting any kind of job will disqualify you. But the money from the job will be of more utility than some bare minimum free healthcare. There's no way that a few healthy kids costs thousands per month. Maybe insurance could if you had more than 2 kids, but most people don't even need that much insurance. I never had medical insurance in my life until I got my first job out of college.

There may be some people who believe they will lose money overall by working, but they're usually wrong. Do taxes and losses of freebies reduce the marginal benefit of working more? I'd say so. But in most cases it is still a net benefit to work more.

[maxrecursion]

There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids.

Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.

The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better.

I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.

[wakawaka28]

>The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better.

>There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids.

I know how expensive the extremes are. Most kids don't need much healthcare. I'm not interested in arguing that with you. If you know, you know.

>Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance.

This is because people have "insurance" that pays for basic routine things. It's more like a price-gouging payment plan or a security blanket. If you got insurance only for severe situations with a high deductible, and paid for routine stuff out of pocket, you'd come out ahead I think. I happen to have a pretty good insurance plan with a low deductible but I didn't have one until I was almost 30. Nor did I qualify for Medicaid or anything else.

The free health care is not actually free. We all pay for it. Even poor people's taxes go toward healthcare that they might not use. Secondly, your choices on this "free" healthcare are somewhat limited. Good luck finding a doctor and getting an appointment in a timely fashion. And some of these doctors specifically maximize services and visits to milk the government for as much as they can.

>I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.

Again I say, if you are poor you should not go out and start a large family. People who have expensive chronic conditions they can't help, or have like 1 kid with that, are kind of an exception.

Back to the original point. I think not working more because of Medicaid eligibility is stupid. If we're talking about the difference between working 5% more hours at the same job and not, then I get it. But we aren't gonna see people give up $40k+ jobs just so they can get Medicaid. Even if they were, it's not a problem with means testing in principle. Each person's circumstances are unique, and the system needs to make people pay when they can. Even as shitty as the system is, we can't afford it. It's on track to be in the red by tens of trillions of dollars. By the time all the bills come due, it might be quadrillions of dollars, due to inflation. I'm not even joking...

[amluto]

> It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help.

Why not? If you give everyone the same subsidy and adjust taxes accordingly, then the welfare cliff disappears, a marginal dollar of income is genuinely valuable, and a screwup in how someone’s need is measured doesn’t matter so much. As an added bonus, wealthier and more influential people might use more social benefits and thus apply pressure to make them better.

> Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.

Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?

[wakawaka28]

>Why not? If you give everyone the same subsidy and adjust taxes accordingly, then the welfare cliff disappears, a marginal dollar of income is genuinely valuable, and a screwup in how someone’s need is measured doesn’t matter so much. As an added bonus, wealthier and more influential people might use more social benefits and thus apply pressure to make them better.

There's no such thing as a perfect calculation for this. There is essentially no welfare cliff now. What you're proposing is to tax "wealthy" people so much that they have no choice but to lean on social benefits, and expect them to be thankful for the opportunity to participate in the welfare system. You say it very optimistically but it is actually an awful thing.

>Why not? Healthy, well educated are a massive, and even essential, benefit to society. If nothing else, they’re the future taxpayers! Why, exactly, should their parents be the ones to bear almost all of the cost of producing them?

Parents of kids get most of the benefits of having those kids. That's why they bear the cost of it. I can't believe I have to explain this... Other people's kids will not help me with my bills or tend to me when I'm sick. If they are somehow taxed to pay for my existence, I expect them to avoid that as much as possible. My own kids on the other hand might actually care about me, even with all the moral decline we have seen in out culture.

[imtringued]

>It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help

Is this some kind of joke? You pay taxes on that check, which means you effectively get less money as you earn more. Do people really not understand how negative income taxes work? The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.

[maxrecursion]

Exactly this. A check to the wealthy is basically a tax refund. The wealthy get a check every month already in social security, so it's literally already happening.

[wakawaka28]

Wow what an attitude... dO YoU nOt UnDERsTaND brO?

Whether you pay taxes on the check itself that 100% comes from taxes is kind of a separate issue. Unemployment benefits are like that and it's stupid. In some situations, Social Security gets taxed or reduced too.

It would not make sense to send a check to a middle class family because they don't need it. People of means who don't have kids and never set foot in a college also should not have to pay extra so that families that don't need help can get kickbacks on college expenses.

>The system is the same in terms of net payouts compared to any means tested scheme, because you can turn the knobs any way you like.

Ok, if you're proposing a means-tested scheme that's different from what I responded to. The other comment suggested sending a check to everyone. These are two entirely different plans. If you pay people who don't need it, you also have to tax them more. And those extra taxes would be unfair to some people. The right thing is to make people pay more for their own expenses when they can afford more, but on a sliding scale.