How PolicyEngine shaped the outcome of the $1 million bet James Medlock won today

The high-profile Twitter bet between James Medlock and Balaji Srinivasan has reached its conclusion, and PolicyEngine played a pivotal role in shaping the outcome. On March 16, 2023, Medlock bet that the US would not enter hyperinflation, with Srinivasan taking the bet and wagering that Bitcoin would exceed $1 million US dollars within 90 days. The bet garnered widespread attention, with Medlock pledging to donate a portion of his potential winnings to GiveDirectly, a charity that provides unconditional cash transfers to extremely poor households in East Africa.

Today Medlock announced the settlement of the bet, revealing that Srinivasan had donated $500,000 to GiveDirectly and transferred an additional $500,000 to Medlock. Srinivasan also donated $500,000 in BTC to support Bitcoin Core development via Chaincode.

It's nice that my original plan to give myself my desired 70% tax rate worked out to nice round numbers, thanks again to @ThePolicyEngine for helping me figure out how much to donatehttps://t.co/p9FPW45xKD

— James Medlock (@jdcmedlock) May 2, 2023

In our March 23 blog post, we presented a mini-app built with the policyengine-us Python package to calculate how much Medlock should donate to GiveDirectly in order to fulfill his pledge of achieving a 70% effective tax rate between taxes and donations. Our calculations ranged from $333,000 to $565,000, depending on Medlock’s other income.

Medlock’s optimal donation size, assuming he and his wife each earn $100,000.

Medlock’s optimal donation size, assuming he and his wife each earn $100,000.

Our free tax calculator and custom app informed Medlock and Srinivasan’s decision on a $500,000 donation to GiveDirectly, highlighting the impact of PolicyEngine’s tools in real-life decision-making scenarios.

Tax policy didn't have major implications for me here. Per calculations using PolicyEngine, getting $500k + Balaji giving $500k worked out the same for me as getting $1 mil and donating. Better for him probably, but main reason was this: https://t.co/Pj2fpczyzT

— James Medlock (@jdcmedlock) May 2, 2023

GiveDirectly, too, has confirmed and shared the outcome (note our Twitter account is @ThePolicyEngine rather than @PolicyEngine).

How did @balajis and @jdcmedlock arrive at the $500k figure? Read @PolicyEngine's piece. https://t.co/tMxu8AaFkx

— GiveDirectly💸 (@GiveDirectly) May 2, 2023

We are thrilled that our policyengine-us Python package and Streamlit-built dashboarding app could contribute to this charitable outcome by providing Medlock with the necessary calculations to determine his donation amount. This example demonstrates the power and flexibility of our Python packages, and we look forward to continuing to build tools that can answer unique questions and support decision-making in various scenarios.

To learn more about how our free tax calculator guided the decision on Medlock’s donation amount, please refer to our previous blog post: How much should James Medlock donate to GiveDirectly?