this post was submitted on 16 Dec 2023
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The bill won't prevent them from contributing to it.
This is exactly the kind of inane rule that feels good, doesn't do any good, but needlessly complicates a system that should be simple, and only will work well for the poor if it's simple.
It is simple. AFAIK people already report their annual income (maybe except stocks for some reason) which should determine their unemployment. That does a lot of good by saving money and annual millionaires don't need unemployment welfare either.
What do you think the cutoff should be for a person to receive unemployment?
I'm not sure, but people earning over 1M yearly definitely shouldn't.
What about people earning $100k?
They probably should
How much money is actually saved? And what does this do to enforcement? The IRS doesn't issue unemployment checks, so now we need the DOL (in each state) to work with the IRS and state tax agencies to determine prior year income before sending out unemployment checks?
And for how many people? Is there actually a glut of millionaires claiming unemployment to the point where this is meaningful savings?
And is the bill indexed to inflation? 1 million dollars today won't be the same as 1 million dollars in 2070. Are you sure congress will keep up with inflation (see: minimum wage).
This bill sounds nice, but isn't actually solving a problem. I'd much rather millionaires and billionaires benefit from social programs than adding arbitrary tests to keep them out. Because every time we add those dumb arbitrary tests we end up with situations like medicaid where the qualifying income for "low income" doesn't change effectively cutting out people that 20 years ago would have qualified.
And these checks all add administrative bureaucracy which almost always balloons the cost.
I can speak to this personally. I have a child with a severe disability who qualifies for the katie beckett program. Normally, my income pushes me out of qualification for medicaid, however, katie beckett allows for children with severe disabilities to enter medicaid (fantastic). To get there, however, I had to apply for medicaid twice. The first to go through the system and get denied and the second time with the denial to qualify my child for the program (nuts, I know). After that, I now have to do 6 month qualification interviews with the insurance company the state uses to administer the program and 6 month interviews with a nurse to make sure that, yes, indeed severe disabilities do not go away. Imagine all the paperwork and admin costs going into making sure I'm not abusing the system? It's not a short process either, it took several months just to qualify.
That's not the end of the craziness either. Once my child turns 18, they'll qualify for social security and medicaid. However, that's only if they have less than $2000 in assets. That limit? Set in 1970 when we allowed people with disabilities to use medicare. We didn't want "rich" kids abusing the system so we put in a means test. Which would be approximately $15k if it were indexed to inflation, but it wasn't. This makes it really hard for someone with a disability to function in society. They basically have to live like paupers if they also want medical care.
But hey, it saves money, so good right? /s
We have a similar problem here with welfare cheques. The amount hasn't gone up with inflation over the years and it's harder and harder to even live a frugal life with roommates on it now. Without other assistance you'll probably end up homeless or go hungry.
Happened to a friend who fell on hard times.
And then once you are on it, the moment you do a tiny amount of work that earns a tiny amount of money they start clawing it back substantially. So you get a shitty job when you get back on your feet, but if they don't give you enough hours you actually lose money, and they'll often demand more than what your able do before clawbacks, putting you in the decision of can you even work this job as you'll be homeless and starving if you do anyway.
Not propely increasing these social programs and/or means testing over decades is brutal.
Even without the IRS, most states already calculate unemployment benefits based on income. This shouldn’t need much bureaucracy.
I don’t see inflation getting so bad that anyone with a million dollars every year need unemployment to survive in the next century unless a war occurs on our land or we run out of resources, by which time all laws should change drastically.
There is 1.8 million of unemployed people on unemployment insurance. Thousands is a drop in the bucket. You are looking at saving, what, 0.1% of the admin cost because a couple thousand people use it that don't need to? You are literally looking at saving around 26 million dollars per year with this measure (maximum payout is $500 per week). That's nothing for an agency that spends over 100 billion per year.
At 3% inflation in 50 years, 500k will be like 100k today in 50 years. In 100 years, 2 million will be like 100k in today's money. It does not take long for inflation to catch up. 3% is the historic average for inflation in the US.
This is an old conservative trick, don't fall for it. If we must have means tests, they must be indexed to inflation otherwise they turn into rollbacks of social programs with time.
I get your point with inflation now (the bill's text hasn't been released so hopefully it does talk about inflation), but 26 million per year is 26 million per year saved. Beyond the percentages there's also actual money.
With a population of 300 million, 26 million translates into an extra $0.08 in taxes per person per year. An amount, I might add, that isn't evenly distributed due to the progressive nature of our tax system. Is saving 8 cents per person really worth the added bureaucracy and potential for rollback of social programs? A million dollars can feel like a lot, I get it, but you really have to look at these sorts of social programs proportionally rather than in terms of absolute numbers.
To put things in perspective, the Arlington cemetery is spending 3 million dollars just to remove a statue.
The US gov could easily save 10 billion dollars, tomorrow, by reducing the defense budget by that amount. Buying a few less unused missiles and tanks. If we want to decrease the tax burden, then looking at the 700+ billion dollar military program almost certainly has a billion places to cut.
Or we could increase the tax rate on people earning over $1 million a year to cover the cost of millionaires using unemployment.
There is virtually no additional bureaucracy needed to carry this out as states already pay unemployment based on previous salary. To me, dividing it among many people doesn’t make it any better, especially since this is a state payroll tax so the poorer people pay more. Anything saved is anything saved.