My favorite data wonk talks OMB's Circular A-4

The Office of Management and Budget issued a new set of guidelines for regulatory analysis a couple of weeks ago, and it’s surprisingly important. It’s also pretty technical, so hang on.

A dollar of benefits to the poorest group is now worth more than $700 in cost to the richest group.


What the article actually says is $1 is valued by a poor person, as much as $700 is valued by a rich person. So, a $7000 tax cut to a rich person, is as valuable to him, as a $10 tax cut to the poor person.



You are complaining about a quote from the article. You know, talking about cost-benefit calculations, and so illustrating that with a cost compared to a benefit.


Poor people already do not pay (income) taxes. So “tax cuts” are of “no value” to a poor person.

Yes, I am, because the way that quite is phrased it sounds like a $1 social benefit to a poor person, would cost a rich person $700. That is not what the article is saying.


So turn it around. A $10 tax increase on a poor person is felt about the same as a $7000 tax increase on a rich person.

That might inform public policy on where to increase taxes.


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A $10 increase on a poor person paying $0 taxes is an infinite percentage tax increase. On a rich person, a $7k tax increase is not even noticable.

There are times when percentages fail to provide a meaningful analysis. This is one of them.