From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Massachusetts Institute of Technology
Date: Sat, 2 Jan 1993 23:53:50 GMT

In article <1993Jan2.203519.7135@csi.uottawa.ca> cbbrowne@csi.uottawa.ca (Christopher Browne) writes:
>In article <1993Jan2.194938.11001@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>>In article <1993Jan2.034012.25456@csi.uottawa.ca> cbbrowne@csi.uottawa.ca (Christopher Browne) writes:
>>>(b) Right now, there is an absolute DIS-incentive to work if your
>>>income is below about $20K.  NIT would at the very least smooth the
>>>"discontinuity" here.
>>again, what about those who are currently working for less than $15K, who
>>if they were smart would immediately quit their jobs under NIT?
>
>The case about which you speculate is one which is not made WORSE
>under NIT; it should actually get BETTER under NIT.
>
>Right now, it would be advantageous for those <$15K earners to quit
>and go on welfare.  RIGHT NOW.  They'd benefit economically from
>quitting their job.  NIT would make it worthwhile for them to work.

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?

>NIT would remove the absolute advantage to quitting the game.

you haven't explained why.

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!

>The fact is, ANY choice is risky.  ANY choice might not work, for any
>number of reasons.  That's not sufficient reason to reject ALL
>attempts at improvement.

ah, but "it's not too likely to improve things" *is* a good reason
not to change. because change is difficult, time-consuming, and
costly.

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).

>>>>Some positives:
>>>>1. Could simplify things, by sacking a lot of civil servants
>>>>   (eliminate the social ministries, and let Revenue Canada collect
>>>>   taxes and print cheques...seems simpler(?))
>>
>>>The improvement would be in the removal of "social ministries."
>>
>>not likely to happen. people just scream "i want" and up they pop.
>
>There seems to be a level of dissatisfaction in the populace that
>might actually let people stop and think.

oh please. our country is going bankrupt *now* and people are *still*
calling for more alleged "rights" and more spending.

>>>>2. could let private sector, free enterprise expand:
>>>>   Ie, if Governments withdraws from running social services, and instead
>>>>   merely hands out money, letting recipients spend it, and letting
>>>>   the private sector compete to provide cheaper, better services.
>>>
>>>Good thought.
>>
>>as i pointed out in another post, the giving of money via the current
>>system or the new one has nothing to do with privatization of services,
>>which i am all for. so why wasn't it done with the current system?
>
>When spending goes specifically through government agencies, as is the
>case for welfare, the law of the land makes it somewhat difficult to
>privatize services.
>
>Services that lie pretty much at the commodity level are easy to
>contract out.  The provision of "social services" is not an obvious
>"commodity."

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".

>>>>And why do we have so many different levels of subsidies, payments,
>>>>handouts etc.? At least if we are going to stay with handouts, just
>>>>give individuals one big lump sum. Surely the administrative costs
>>>>would go down? 
>>>
>>>Even if admin. costs don't go down, it at least becomes more clear
>>>that it IS a handout.  People can't ignore it anymore then.
>>>
>>>I have a feeling that the TOTAL PAYOUT would go up
>>
>>then NIT is unacceptable. because we need to cut the total payout.
>>it is bankrupting us.
>
>If the efficiency goes up, then total COSTS may go down despite the
>PAYOUT going up.

see another post where i discussed this. the total payout is what
is out of control. it must be addressed because it is where
the big money is. attacking "government efficiency" is like supporting
mom and apple pie. it's a crutch, and it's not enough.

>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?

>Case #2:  199X - Under NIT
>
>Welfare Recipient received $20000.
>Administration cost $1000.

(chuckle, chuckle)
is this the fiction department? :^)
c'mon, even private charities aren't that good...
i get your point (though i don't agree with it), but let's stay
in the realm of the living here... you have absolutely no reason
to believe that the government will improve that much, since it
never has in the past.

>(let's ignore inflation/COLA here), 

fine, let's ignore it here. but don't under-estimate how dangerous
it is, and how important it is to get rid of it.

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