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.
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A dollar of benefits to the poorest group is now worth more than $700 in cost to the richest group.
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-IGU-
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.
Steve
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.
-IGU-
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.
Steve
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.
—Peter
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.
—Peter