From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Massachusetts Institute of Technology
Date: Mon, 4 Jan 1993 00:35:27 GMT

In article <1993Jan3.041508.27486@csi.uottawa.ca> cbbrowne@csi.uottawa.ca (Christopher Browne) writes:
>In article <1993Jan2.235350.22372@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>>why? why would i work for less than $15,000 a year when i don't have to?
>>when i know the government will pay me $15,000-X where X is what i earn?
>>for that matter, why work for $17,000 a year when that means i'll
>>be doing real work for a marginal $1 an hour?
>
>THAT is what the current welfare system does.  People on welfare are
>only permitted to earn some trivial amount of money (something like
>$50/week) before it gets deducted dollar-for-dollar off of their
>welfare benefits.
>
>That's NOT the way a Negative Income Tax would work.

then i have been mislead. because that is how Gerald described it.
if that is incorrect, then of course my arguments are based upon 
error and will make no sense!

>The typical way a NIT would work would be to treat ALL sorts of income
>as taxable income.
>.
>.
>.
>Thus, the total cash receipts for this person were $16,500 for the
>year.  Considerably more than $10,000.

i appreciate you taking the time to lay all that out.
the fact is that if earning $10,000 means you end up with $16,500,
then the system *is* different from what Gerald explained, and therefore
my premises were incorrect.

>Case #4:  Person that earned $28,571 (it's an important income level)

sure, that is the maximum subsidization level.
i get it.

>>>NIT would remove the absolute advantage to quitting the game.
>>
>>you haven't explained why.
>
>The examples above show why it works.
>
>>in fact, i could argue that the "visibility" of the NIT will make it
>>worse. because if what you say is true, then no-one who earns
>>under $15,000 should be working now. if you make things explicit,
>>it will become very clear very quickly to all making under $15,000
>>that they should quit. and even those making $20,000 would realize
>>they are valuing their time at $2.50 an hour!
>
>Nope.  In the example, those making $20,000 will be valuing their time
>at about $6.93 per hour.  It's less than the $10.67 that they're
>grossing, but that would be true in any case.

if the system is as you describe it, my arguments above are
withdrawn. i still don't have any way of knowing how the totals
add up in the new system compared to the old, but you *have* addressed
and refuted my counter-examples. what a pleasure! seriously!

>>true, i haven't yet explained my alternative to these two
>>abominations. but you can probably figure out most of it based
>>on my posts. maybe we can discuss it in another thread. i'm
>>just trying to keep peoples' minds open to the possibility
>>of something else at this point, before this NIT is acclaimed
>>without challenge (even though i know it probably will be anyway).
>
>Call me ignorant.
>Call me "too much among the trees to see the forest."
>Call me whatever.
>Could you please be specific about your alternative?  

i will explain in bits and pieces, which will no doubt get torn
to shreds. i must do this because school starts tomorrow and i
just don't have the time that i have had the last two weeks. for
more detail, i suppose i would say that my views are consistent with
many of the political principles of the group known as the
Libertarians, though not all.

basically i support no public welfare for adults.
i would allow charity to perform that role. i would allow the
government to provide food stamps, at a minimal level to 
ensure non-starvation, as a compromise with those who cannot
handle the concept of a pure independent society.

i would make all charitable donations fully tax deductable.
i believe that removal of the current high tax burden would allow
charity to perform a far greater role than it does now, and i believe
that such a society would be more productive and would have less
poverty that does the current one.

>About all that I can gather is that you would probably want to cut off
>any payments that in any way resemble welfare.

in principle, yes. the food stamps would be a compromise.

>If I'm hitting the nail on the head, then my comment is that it's not
>going to be politically acceptable, and it won't happen.

never claimed it would. but that doesn't make the current system right.
nor does it make it sustainable. the current system is founded on a lie.
and it *will* come crashing down. it is just a matter of time.
supporting something which is "politically acceptable" is fine; but
remember some of the atrocities which have been considered politically
acceptable in the past.

>I wouldn't
>mind cutting off MOST of it, but that doesn't change the fact that it
>still won't happen.

the NIT doesn't cut off MOST of it, not even close, you must admit.

>>OK, i think i know what you mean here. i was referring to the dollars
>>paid out by the welfare system. you are talking about the inherent
>>subsidies which are represented by free social services. i must agree
>>that if NIT *really* did lead to the elimination of these services,
>>that would be a plus. but the key word is "really".
>
>I *think* I was referring to both; it may have been late at night,
>though :-).

these arguments are starting to wear me out too. :^)

>I would agree that it will be somewhat difficult to eliminate all of
>'em.  But ANY improvement would be good.

sure.

>>>As it stands, for every dollar that actually goes out, three are spent
>>>on administration (social case workers, offices, and the likes).  It's
>>>a whopping big cost.
>>
>>these numbers are not consistent with mine. do you have a source for
>>this? also, are you including all the other social spending dollars
>>which aren't subject to major administrative costs?
>
>Which direction are you thinking?  Are you suggesting 5:1, or a "mere"
>1.5:1 instead of the 4:1 that I suggested?

the latter. my numbers suggest that the total payout far exceeds the
administrative costs. but my numbers are quite aggregate.

>>>Without real numbers from some place like Stats Can, it's hard to
>>>determine the exact effects of an NIT scheme; but it wouldn't be hard
>>>to determine the impact of varying tax rates/minimum income levels.  I
>>>suggest that you try playing with a few numbers.  It might become more
>>>clear just how NIT would work.
>>
>>every one of these programs assumes all the wonderful things it needs
>>to justify its intentions, whether they are reasonable or not. you
>>assume existing systems will be dismantled, when there is no precedent
>>for this, and it would be politically incorrect, and therefore
>>very hard to do. you base the NIT upon theoretical efficiency improvements
>>which also have little precedent. but then Clinton is going
>>to "take care of the deficit" by assuming 3% growth per year. sure!
>>why not? why not 4%?
>>
>>sorry, it's too hard to swallow with nothing to back it up but
>>the usual faith and promises, and so much history to suggest otherwise.
>>
>>as someone once said: "fool me once, shame on you. fool me twice..."
>>i personally have lost count.
>
>Well, tell me how you're going to improve things WITHOUT changing the
>system.  THAT should be VERY interesting.

the changes you are suggesting seem significant, but they are based
on a lot of assumptions i still have no reason to accept. and they
don't, unfortunately, change the key underlying concept, that people
have the "right" to have others work for them.
so as far as i am concerned, the change represented by the NIT
is not the change that needs to be made.

no-one wants to hear what i have to say. because my system is not
"nice" enough for them. people want to believe that they can have
everything. that is why they demand "no more porkbarrel" projects
for *other* districts. and why they demand "less taxes, more
services, and (no deficits (unless it costs *me* anything)).
these are the same people who want to eat meat, but don't want to
know where it comes from. and who don't want to accept the fundamental
natural law that no species (or society) can survive that puts the weak
over the strong, even if that gives everyone warm fuzzies.

so i don't expect anyone to listen to me. but if i have to go
down with the ship, i am going to scream as loud as i can before
it happens. just *maybe* people will wake from their stupor before
it is too late. but history suggests otherwise. i may be a prophet
of doom; but i can live with that title. i can't accept being lumped
together with the fools, and then saying afterward "i knew this
would happen, but i didn't say anything".

--
charles
Newsgroups: soc.culture.canada,can.politics