[300bps]

The government isn't really giving an incentive at all

This statement is incredibly naive and shows a complete lack of knowledge of economics. When the government gives incentives for making less money, then they are giving an incentive to make less money. It's that simple, but let me explain.

To get a bronze family plan on healthcare.gov, I was quoted $12,000 per year with a $12,700 deductible. Basically, I'd be paying $24,000 per year for healthcare.

That's the list price, which is what I have to pay if my wife and I make more than $96,000 per year (1/4 of the income goes toward healthcare). The cost goes down the less I make below $96,000. This is government giving me an incentive to make less money.

[byoung2]

* This is government giving me an incentive to make less money.*

Or at least report less income. I bet a lot of people will move into the shadow economy, and get paid in cash. Instead of getting a W2 with 50k on it, I can work a part time job and report 20k, and do some off books work for 30k. I would qualify for the subsidy, and get a chunk of cash that I don't pay taxes on.

[dllthomas]

Of course, prosecution for tax evasion when you're noticed living beyond your means is an incentive not to do that.

[hga]

Funny enough, it's just been reported that under Obama criminal tax prosecutions have gone up, e.g. http://news.yahoo.com/u-fighting-increase-tax-crimes-under-o...

"[...] under Obama the average annual number of tax crime prosecutions sought by the Justice Department has been 1,568, versus 1,303 under Bush."

Doesn't sound like that's going to strike fear in the hearts of many. Plus I suspect detecting small fry like in byoung2's example is rather difficult.

[dllthomas]

If that's 100% of the people trying, then it should certainly strike fear in the hearts of those who might try. If it's 0.000001% of the people trying, then it shouldn't phase anyone. I have no idea what the statistics are, though given that there are only 300 million Americans we can put some extremely loose bounds on it (won't be less than one in 200 thousand, about, if my napkin tells the truth). I don't think those bounds are enough to do anything useful, though.

[maxerickson]

How many off the books $30,000 jobs do you think there are?

I'm sure there are lots of them, but I wonder if there are so many that it is something to worry about.

[hga]

In "the trades", e.g. electrical and plumbing work, LOTS. Don't know about you, but my family pays in cash for that sort of work without asking any questions....

Elsewhere, well, look at e.g. Italy where I've read that the people don't view the central government as legitimate and evading taxes is said to be the national pastime. Read up on the tax police stopping cars in the industrial north and checking trunks.

Our current tax system is truly voluntary in a certain sense, and would seriously break down if we widely adopted such attitudes for whatever reasons.

[byoung2]

How many off the books $30,000 jobs do you think there are?

Given the audience of this site, web design would be the obvious choice. But here are some more:

http://livesafely.org/financial-freedom/67-jobs-that-pay-und...

[maxerickson]

That's a list of roles that does nothing to establish that they provide opportunities for $30k and nothing to estimate how many such positions are available.

I'm not arguing that cash jobs are rare or nonexistent. I'm wondering how prevalent "really good ones" actually are.

($30k being a real good cash job is just like my opinion, but whatever)

[jeremymcanally]

That's a seriously narrow definition of "incentive." It's only an incentive if the amount they're offering you is more than the difference in income, which you and I both know it isn't.

And I have no clue what state you live in or your age obviously, but in Florida, which (previously) had some of the highest health care costs in the country, a family Bronze plan is only like $4k a year. I could get a Platinum plan with $0 deductible for about 30% than the price you're quoting. So, let's not act like those are normative numbers.

[300bps]

Incentive has a very specific meaning, and you don't understand what it means. If I offer you $1 to prance around like a monkey, then I've offered you an incentive to prance around like a monkey. It doesn't matter if you could make $2 slithering around like a snake. I've still given you an incentive to change your behavior, and many people will prefer the offer I am giving and thereby change their behavior.

And beyond that, you have no idea what you're talking about. I just put in my exact family situation into healthcare.gov for Broward County in FL and it is $987 per month with a $12,000 deductible for every Bronze plan. I'm guessing you're entering a ridiculously low income and taking the subsidies into account. Or you're looking at the catastrophic plans and thinking it's bronze, which it's not.

This will be my last response; you are an incredibly naive person and it is not my job to educate you.

[_ea1k]

I do get what you are saying, I just think it is a weak incentive. If you were making $96k would you forego part of your income in order to get a subsidy?

[hga]

You need to look at the marginal cost on making that next dollar.

It's a big problem for our official poor, where there are wide ranges of income that cost them more in government benefits than they get in highly repressively taxed income.

And look at the results of supply side tax rate cuts, JFK's from 91%, Reagan's from 50% and 75% as I remember ("earned" and "unearned" (passive) income). Those had major effects, and while I'd gone to college a year before the latter's election I noticed how it changed my parent's economic behavior in ways that were good for the economy.

[_ea1k]

Again, I'm not necessarily disagreeing with you w/r/t policies outside of the ACA, but weren't we talking about health insurance and a guy that makes $96k? In looking at the tables for Health Insurance Marketplace subsidies, I just don't see the major impact here.

[hga]

Look at the chart here on existing implicit marginal tax rates: http://legalinsurrection.com/2014/02/cbo-confirms-obamacare-... (implicit includes loss of subsidies):

Note the rise from 25% to nearly 50% in the ~ $65K to ~ $85K income range, after which it plateaus to around that $96K threshold; add Obamacare subsidy losses and we're absolutely guaranteed a significant impact, unless people's economic behavior has radically changed since the '80s. Which is of course what the CBO is saying, among many other dire things (0.5% GDP loss, 6-7 million losing their employer health coverage, around the same number uninsured (although a lower percentage because of population growth)).

Note also the > 100% rates around $25K to $45K, and the steep climb that starts around $15K. That's the big effect I was talking about, except we generally don't count people or families in most parts of the country making $45K as "poor".

But, yeah, exactly what's going to happen at that income range is yet to be seen, and at this moment neither of our impressions can be stated to be right or wrong.