From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Massachusetts Institute of Technology
Date: Tue, 29 Dec 1992 17:09:25 GMT

In article <1992Dec29.103313.24923@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>In article <1992Dec27.163509.12337@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>>In article <1992Dec18.223847.9286@alchemy.chem.utoronto.ca> golchowy@alchemy.chem.utoronto.ca (Gerald Olchowy) writes:
>>>Basically, yes, and it would be a lot more efficient than hiring the
>>>thousands upon thousands of bureaucrats to deliver the complicated
>>>set of social programs which essentially do the same thing now.
>>
>>no.
>>there are some important differences. first and foremost is that this
>>money would be paid to all those who are currently working as well
>>as those who are not. it would destroy the incentive for anyone
>>with earning potential less than $15,000 to work. it would create
>>a de facto $7.50 minimum wage, hurting canada's companies.
>>
>
>Working people already receive hidden payments, through subsididies, lower
>tax rates that aren't based on how many services they use (such as medical
>care etc.)
>
>A negative income tax (I dislike this term) would bring the subsidies out
>into the open, where you could see them.

first of all, i have no reason to believe that the other subsidies, etc.
would be annulled when the new system was imposed.

second, your point about disliking the term is exactly a point i made
later -- it is government doublespeak that justifies what is nothing
more than welfare. 

>Philospohies based on self interest can even explain the need for social
>programs, up to a point.

a *very* limited point.

>Basically, a certain amount of social programs,
>ie. the rich/middle class paying money to people who are poorer/haven't
>earned it, is NOT altruistic, and therefore makes sense (if improving
>your self interest is your prime motivation). Why? because you have to take
>a long term view with some things: subsidize a small amount to the poor,
>or pay more for a police state needed to preserve your own security
>(drastic), or wind up guilloutined with the aristocrats? Paying a certain
>amount to the poor can actually advance your self interest.
>(that 'certain' amount is open for study...)

that is a classical argument.

two problems with it: first, it is a post hoc justification for social
spending, i.e. when social spending was implemented, "protection of
the rich" was not on the list of objectives. but that is not really
*that* big of a deal.

second, and more importantly, you are confusing slavery with
free action. if the "rich" and middle class want to ensure that 
the poor don't attack them, they will protect their own self-
interests by doing exactly what you suggest, or they will suffer
the consequences. those are the responsibilities that come with
wealth. but *forcing* people to do that cannot be justified. you
can't tell someone that you are taking their money "for their
own good". if that is true, let them decide, it's their money!

oh, also, if it was a "small amount" which was given to the poor,
you'd probably not see much complaint. the "small amount" part
died long ago.

>>>If we are going to have a social safety net...it might as well be
>>>the most efficient one possible, and the negative income tax is
>>>that.
>>
>>another major problem with this, and i do see it as major, maybe others
>>don't, is how it legitimizes social welfare. it sends the message that
>>there is nothing wrong with allowing yourself to be borne upon the backs
>>of others. it will accelerate the already out-of-control social spending.
>>
>As if the system doesn't already do that. Negative income tax is a bogus
>term. The term is tax-and-transfer (ie tax people who make money, transfer
>to people who do not).

on that we agree. and it should be called welfare. even that doesn't
really describe what it is: slavery.

>This would cut out a lot of beauracratic fat:
>if we AGREE to the notion of subsidizing people, then the best way is
>simply to hand over the X dollars we were going to pay in subsidies anyway
>(cut out the middleman), not give it to government agencies to fritter away.
>Suppose government is going to spend $1000 dollars on someone (due to whatever
>need), you can be damn sure that the needy person will be happier with the
>$1000 to spend the way he thinks is best, than to get $500 in cash, and
>be told that $500 disappeared into the government boondoggle of paper-pushers!
>The taxpayers said 'out of compassion, we deem that this person deserves
>$1000 of support' but the current way the government implements
>state sponsored charity gaurantees that money will be wasted by clerks,
>ministries of regional misdevelopments, special interest groups etc.

there is no reason to believe that this will not happen anyway. the government's
track record in this area is very poor. my faith in their ability to find
a way to make a bureacratic mess of *anything* is well-developed from 
experience, and virtually uncontroverted. perhaps you can suggest some
precedent to justify your belief that this will be an exception.

>We really have to realise that social programs etc. are mostly an act of
>compassion, or personal philosphy,

then why not let those who feel that compassion or personal philosophy
do the spending, and leave the others alone?
if the majority don't support social spending, how can taxes (or deficit
fiscal policy) to pay for it be justified?
and what kind of a society allows person X to decide to spend person Y's
production on person Z?

>they aren't something that the laws
>of the market say we must or must not do.

then why should the law of the land say we must do them? how can they
be anything but enslavement of the producers for the sake of the consumers?

>But if we do decide to have
>social programs (and it kind of looks like Canadians do support this),
>we SHOULD follow the economic laws that drive the market, not try and 
>distort the free market the way the socialists insist on doing.

it is *inherently* distortive. it is an attack on the market. there
is no way to follow economic laws when one does not respect them.

>(unfortunately, the dim witted liberal-socialists-communists think
>that free market economics PRECLUDES being compassionate towards others,
>when it DOESN'T!)

actually, i don't think they believe that. rather, they believe that
if they can enslave those who don't feel that compassion, and give the
money to the poor, they can buy votes with others' production, and
look like the heros. what a great system!

they also feel that because people don't like being enslaved, and so
they react negatively, or blame those receiving the fruits of their
labor, or refuse to give to charity because the government already
steals so much of their money to give to charity, that if the government
stops stealing money there would be no charity. they never consider
the possibility that *they* are the problem.

>There is always the risk that social programs, ie subsidies to the poor,
>can become the causes of dependency, fraud etc.

that risk is now 100%. it already is that way.

>the tax and transfer system,
>can have built in incentives to help minimize that, such as conditional
>payments: based on enrolment in re-training programs or face a deduction
>(ie this would apply to basically healthy, employable people). One could
>expand on this to minimize abuse and/or dependency creation.

they don't work. i have seen how these systems can be perverted.
people "look for jobs" knowing they are unqualified; workers work
the minimum necessary to get their UI, etc.

>As always, harness natural market forces to make things work more efficiently,
>instead of working against them (which leads to inefficiency and failure).

you can't have your cake and eat it too.

>>>The same goes for the flat tax...it reduces the need for bureaucrats
>>>in tax department, and reduces the need for wasting valuable human
>>>resources in the fields of tax law and accounting. 
>>
>>flat taxes will never work because the general public is under the
>>impression that the more money you make, not only the more tax
>>should you pay, but the higher *percentage* of income should you pay.
>>a flat tax would be labelled "regressive" and shouted down by the
>>majority who has the most to gain from higher marginal tax rates.
>
>there ought to be mandatory reviews by the voters for taxes, or some
>mechanism to make sure that: taxpayers only pay for services they
>want to receive or they voted to approve. *WE* delegate to government,
>government does not have the right to impose itself on US; we should
>not be expected to give government a blank cheque. If I pay a tax, I want
>to know exactly what I'm paying for, and whether it benefits me (or
>if I approve of its social notions); I don't want to be the convenient
>cash cow for government to bleed dry for to pay for its mistakes or
>its own agenda. In short, there should be a closer safegaurd that
>taxes represent the level of services.

great! sounds good.
but answer this: do you ever expect that this will happen? what does
the government have to gain by doing this?

also: if you *know* that you are paying taxes for services you don't
receive, and that you will only receive them if you convert from
being a producer to a consumer, doesn't that make you angry?
doesn't it make you wonder if something is wrong with the system?

--
charles
Newsgroups: soc.culture.canada