From: cbbrowne@csi.uottawa.ca (Christopher Browne)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Dept. of Computer Science, University of Ottawa
Date: Wed, 30 Dec 92 13:30:10 GMT

In article <1992Dec30.074518.8016@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>In article <1992Dec29.170925.18175@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>>In article <1992Dec29.103313.24923@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>........
>[ long argument between libertarians ]
>
>I'm sure you will concede that a tax-and-transfer system of welfare
>(or negative income tax...ick), is a STEP in the right direction.
>It has the benefit of being more efficient than the current system
>(you are right about the implementation: if it were just slapped on
>top of the same same mess, it would make things worse, not better.)
>And it is important to take a step in the right direction, rather than
>stay in one place, cursing the darkness around you.

Well put.

Much of the discussion has been very long-winded on the excessively
philosophical side.  Sure - NIT isn't the PERFECT answer.  But that
wasn't the question.  It's probably about the BEST answer that the
politicians would conceivably be able to get into place.

Any more drastic alternatives would result in the "riot police on each
corner" situation, because it would just be too much for people to
adjust to.

What's kind of neat about it is that it makes it less important that
the income tax system have the "graduated" rates.  The way things work
right now is that in roughly the $5000-15000 income bracket, there's
an effective "taxation" rate that's probably greater than 100%.  It
then falls to roughly 26%, and then rises back to about 52%.  The rate
of >100% is what discourages people from getting out of the "welfare
hole."  Having a "constant" tax rate of 35% on ALL incomes over (say)
$12000, where $12K is the "minimum" income, might make everyone
happier.

NIT won't be able to provide PERFECT incentive for people to try to
get work that pays well, but it certainly WOULD be better than the
current welfare system.

Much of the recent discussion really has nothing to do with the NIT
system, but rather just the complaint that "taxes are bad."

By the way, the Minimum Annual Income (MAI) would probably be a little
higher than you'd expect.  The entry of the new system would be a good
opportunity to cut off some indirect welfare benefits like
free/unusually cheap: Health stuff, Rent, Day care.  Expensive
subsidized positions would no longer be something that they get.  The
MAI would get inflated a little to make up for this.

The biggest procedural problem might be trying to figure out what
happens with dependents?  Do minors get differing rates?  Or are they
ALWAYS considered dependents?  If they're allowed to collect if they
leave home, will this encourage a generation of children to leave home
early?
-- 
Christopher Browne                |     PGP 2.0 key available
cbbrowne@csi.uottawa.ca           |======================================
University of Ottawa              | Genius may have its limitations, but
Master of System Science Program  | stupidity is not thus handicapped.
Newsgroups: soc.culture.canada,misc.talk.politics