From: cbbrowne@csi.uottawa.ca (Christopher Browne)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Dept. of Computer Science, University of Ottawa
Date: Fri, 1 Jan 93 19:45:07 GMT

In article <1992Dec31.005748.22463@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>In article <1992Dec30.133010.11138@csi.uottawa.ca> cbbrowne@csi.uottawa.ca (Christopher Browne) writes:
>>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.
>
>maybe, but it serves as a distraction from dealing with the real problem.
>you are just substituting one bad system for another. and i have seen
>no evidence yet to suggest that it is even better.

It would be useful to actually change the subject line as well.  If
you're not talking about NIT, but rather about, say,
"Institutionalized Fiscal Irresponsibility in Government", then it
would be useful to say so.

>>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.
>
>then phase in the drastic alternative gradually. but do phase it in!
>because the NIT is a non-solution to a big problem. and if we don't
>tackle the problem, it will tackle us. and then the "riot police on
>each corner" will happen anyway, and worse.
>
>how can it be otherwise? the NIT is not going to solve the enormous
>deficit problems due to social spending. so what kind of solution
>is it?

It makes the price much more explicit.
It shows to the people who is paying, and who is recieving in much
clearer terms than the current system where the bills get hidden very
well.

>>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%.
>
>there is? how so?

I'm not clear on the exact numbers, but I think that welfare probably
maxes out at EXPLICIT benefits of about $12K.  However, someone that's
on welfare gets effective benefits that are probably much higher
because of things like subsidized rent, daycare, and supplimental
health care.

What it means is that it is economically better to earn NOTHING (zero.
nada.  Sit at home and watch soap operas) than it is to work in a job
that earns 'em $15,000 a year.

If a welfare recipient went to work, a couple thousand gets eaten by
income taxes, and he/she would LOSE those other benefits, which
effectively costs another couple of grand.

I stand by the ">100%" assertion.

>>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.
>
>everyone who is the recipient, that is. robbing a bank and giving
>them the proceeds would make them happier too. should we do that also?

If taxation is considered the same as "robbing", then I suppose
there's no difference.

If you refuse to pay taxes, then this would be the moral
justification.  Revenue Canada doesn't care about your "moral
justification."  They work based on the law of the land.  And the
Income Tax Act makes the taxation form of "robbery" quite legal.

>>Much of the recent discussion really has nothing to do with the NIT
>>system, but rather just the complaint that "taxes are bad."
>
>more accurately, it is the complaint (on my part anyway) that "forcing
>one person to work for another" is bad. taxes are only "bad" when they
>are spent on unnecessary or unjust activities.

Take your argument to the papers.  "Taxation is Slavery!"

You've said it quite enough in this forum, and I think everyone is
quite aware of what you think of taxation.  To belabour the point any
more probably wastes peoples' time.

>>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.
>
>i don't think that will happen. because all the people have to say
>is "we need!" and the politicians will say "oh my, we wanted to get
>rid of these other programs, but people will suffer, gee we can't do
>that to them, it wouldn't be *fair*"...
>
>>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?
>
>and as we all know, the government is *great* at doing this fairly, 
>efficiently and inexpensively. yeah, i see those savings just
>*rolling* in.

I don't think that the primary issue is in fact that of *saving*
money.  Not much money is likely to be *saved* by a NIT tax.  The
issue is that the system is very clearly unfair to those that are just
above the welfare line.  It's very GOOD to those on welfare, but cuts
off in very strange places.

If by improving the taxation system, people can be encouraged to
actually go off of welfare, then that is a "win."  The societal
changes that would be associated with such an event might be
economically worthwhile for reasons not directly related to the tax
changes.

You seem to be very good at griping about "Taxation Slavery."  Do you
actually have any ideas to suggest that could possibly be turned into
government policy?  Or are you only able to shoot down ideas?

-- 
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,can.politics