This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
[0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
[1] This number might be slightly different if the two taxes interact with each other.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
[0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
[1] This number might be slightly different if the two taxes interact with each other.