"I can't afford to take a larger salary"

The post that was quoted here has been removed

i live in the uk...

Originally posted by trev33
i live in the uk...

On 'benefits'?

Originally posted by KazetNagorra
And yet Norway, with much more generous benefits, has almost zero unemployment. Perhaps you need to look somewhere else for an explanation for the problem of unemployment, gangs and chavs. Perhaps at someone named Thatcher.

Margaret Thatcher rescued us from from the economic mire in which the OldLabour regime (1964-1979) left the UK, with inflation running at 27% and in debt to the IMF for a loan which averted bankruptcy.

Originally posted by retiarius
Margaret Thatcher rescued us from from the economic mire in which the OldLabour regime (1964-1979) left the UK, with inflation running at 27% and in debt to the IMF for a loan which averted bankruptcy.

http://econ.economicshelp.org/2008/10/unemployment-in-uk.html

For some reason, I thought you did tax and estate law. Yeah, there are some places at the low end of the income distribution where a household with specific characteristics and that uses programs optimally faces a very high (even over 100😵 net marginal income tax rate due to the ineligibility for transfers like food stamps.

There's a paper by Larry Kotlikoff and Jagadesh Gokhale have a paper from 2002 called "Does it pay to work?" that explores this.

Originally posted by sh76
The exact words from a client of mine.

He's making $12/hr. His employer would raise him to $20, but the increase in salary would be more than offset by a loss in programs eligibility.

He didn't tell this to me, but reading between the lines, his employer probably slips him a few bucks under the table.

This idea of basing government programs solely on income tests need a re-thinking.

A higher minimum wage would solve this problem, surely?

Originally posted by Teinosuke
A higher minimum wage would solve this problem, surely?

A drastic reform of the 'benefit' scam is the only solution.

Originally posted by retiarius
A drastic reform of the 'benefit' scam is the only solution.

As long as the minimum wage is high enough to ensure that it's more advantageous to be in than out of work, most people will find jobs if they can. Of course, Thatcher pursued the opposite course, deliberately accepting a fairly high level of unemployment since that would depress wages!

Originally posted by Teinosuke
As long as the minimum wage is high enough to ensure that it's more advantageous to be in than out of work, most people will find jobs if they can. Of course, Thatcher pursued the opposite course, deliberately accepting a fairly high level of unemployment since that would depress wages!

Conversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".

Originally posted by KazetNagorra
Conversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".

Is there a negative income tax in the lowest bracket in the Netherlands?

Originally posted by Teinosuke
Is there a negative income tax in the lowest bracket in the Netherlands?

No. There is a tax-free bracket. There's also a tax credit based on income and rent, and a tax credit based on the number of children in a household.

Originally posted by Teinosuke
A higher minimum wage would solve this problem, surely?

Just how high? Surely not more than $12/hour?

Originally posted by KazetNagorra
Conversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".

A negative income tax bracket exists in the United States.

Look up the earned income credit.

Originally posted by telerion
For some reason, I thought you did tax and estate law.

I do, but I also do trusts (which go hand in hand) and it's common for low income people to want to set up trusts to hold property for their children (or whatever) in a manner that doesn't affect their benefits eligibility.

Originally posted by sh76
Just how high? Surely not more than $12/hour?

If it's going to work as an incentive, then I suppose it depends how generous benefits are...

It's nine euros in France and only slightly less in the Netherlands, Belgium and Germany. That's around 12 dollars, isn't it?