Negative Income Tax

[The world will shine with light in our nightmare]

And if so, would you support the elimination of all or some federal entitlement programs to pay for it?

[TNF]

Depends on how it's structured. I favor a universal basic income as an addition to existing social welfare programs, not a substitute for them.

[Maxwell]

I think it's a good idea on paper, but I don't think it'll work in practice.

[The world will shine with light in our nightmare]

I think it's a good idea on paper, but I don't think it'll work in practice.

Would you explain your reasoning, please?

[Maxwell]

I think it's a good idea on paper, but I don't think it'll work in practice.

Would you explain your reasoning, please?

Sure,

I think that the negative income tax, instead of basic welfare in which there is a sort of stigma attached to the money, it seems more like a tax refund. Maybe it's just me, but with a tax refund, it seems more like money one gets one time a year for the thrill of it. Obviously, it won't be too big, but I think one could get how I view this. A one time bundle of cash doesn't help poor people necessarily. I might be for a negative income tax in EXCHANGE for other forms of welfare if the following were put in place: a mechanism that splits that refund month to month. Otherwise, I believe it would not be used efficiently and I think other ways of welfare would help people more greatly.

[TNF]

I'm working out a feasible proposal for something like this right now, but I keep hitting roadblocks on how much it would cost. My proposal would essentially guarantee every individual in the country be paid $12,000 per year, which roughly translates to about $230 per week. $12,000 per year is actually a bit more generous than the existing IRL federal poverty guideline (which, is outdated because it's based on 1960s definitions of poverty, but is around $11,490) for an individual, but I think it would do the trick. I would hesitate to set it any lower than that and would advocate extreme caution in trimming the social safety net; a basic income operating alone is far worse than the existing social safety net, in terms of stinginess, if the basic income is set too low. You'd have to have a basic income of like, $30,000 per year to make the welfare programs redundant, IMO.

I think the best way to pay for such a program is to nationalize the energy sector and have the basic income operate as a 'dividend.' Those are Atlasia's resources anyway, so why should the energy companies get all the profit off of them? Alaska already has the Alaska permanent fund, why should Atlasia have an Atlasian Permanent Fund?

[TNF]

I think it's a good idea on paper, but I don't think it'll work in practice.

Would you explain your reasoning, please?

Sure,

I think that the negative income tax, instead of basic welfare in which there is a sort of stigma attached to the money, it seems more like a tax refund. Maybe it's just me, but with a tax refund, it seems more like money one gets one time a year for the thrill of it. Obviously, it won't be too big, but I think one could get how I view this. A one time bundle of cash doesn't help poor people necessarily. I might be for a negative income tax in EXCHANGE for other forms of welfare if the following were put in place: a mechanism that splits that refund month to month. Otherwise, I believe it would not be used efficiently and I think other ways of welfare would help people more greatly.

I share my opponent's criticism here. I wouldn't want the program to be a big tax refund. Fundamentally, I want a basic income policy that lets everyone make enough money to live on without having to work. This will force employers to raise wages (a win win for everyone) and eliminate a lot of s**tty jobs too by encouraging employers to invest in automation, while not really hitting workers too hard, because they'll have a basic income policy.

[PJ]

I think it's a good idea on paper, but I don't think it'll work in practice.

I agree with this. Pretty much what Maxwell and TNF said.

[Fmr. Pres. Duke]

Why would anyone want a negative income tax except the super wealthy who don't want to pay taxes?

[The world will shine with light in our nightmare]

Bumping this.  I'm still not sure if I'll pursue this in the next Senate (especially because of its cost), but I still think we should work on a bill that makes welfare more effective and, if possible, less costly.

Why would anyone want a negative income tax except the super wealthy who don't want to pay taxes?

What do you mean?  The wealthy would pay more taxes.

[Marokai Backbeat]

The thing about programs like this is that they always seem like a great idea, but in the end a much more efficient way of dealing with poverty or other problems are targeted benefits and programs, instead of a simple lump sum of cash. These ideas also tend to skyrocket in cost the second you start thinking of how to implement them. I'm not inherently opposed to the idea or anything, and giving a basic income to certain sections of society, at least, makes sense, but take food stamps for instance. Giving someone 300 dollars straight out is a worse way to combat hunger than giving them 300 dollars in food credit. If anything, we should probably create a suite of "stamp" programs like that for other purposes, instead of a basic minimum income.

I do, at least, agree with creating nationalized energy utilities, but good luck getting that passed.

[Marokai Backbeat]

Giving someone 300 dollars straight out is a worse way to combat hunger than giving them 300 dollars in food credit.

This doesn't seem self evident to me. Besides, the comparison shouldn't be $300 in cash versus $300 in benefits; it's really $300 in cash versus $300 in benefits minus administrative costs. A basic income is a far less costly and intrusive way of administering a welfare state that actually guarantees that everyone's basic needs can bet met.

But it guarantees no such thing, because it relies on people to spend the money efficiently and on the things they need, which is quite the assumption. $300 in food stamps is more efficient because that money (in addition to being inserted right back into the economy, which isn't a given otherwise) will, always, be spent on food and only on food. Even if it's traded for other things from other people under the table, that money will be used to buy food and end up on someone's table, somewhere.

The same can be said for other things. What is better, to help someone stay warm in the cold winter? Directly subsidizing their bills, or giving them the equivalent amount of money in a lump sum and hoping they spend money on it? Even if it keeps most people warm, there will always be a certain percentage of people who decide not to use that money for what it was intended for, or for what they need. The same principle is true for other things as well.

[The world will shine with light in our nightmare]

Giving someone 300 dollars straight out is a worse way to combat hunger than giving them 300 dollars in food credit.

This doesn't seem self evident to me. Besides, the comparison shouldn't be $300 in cash versus $300 in benefits; it's really $300 in cash versus $300 in benefits minus administrative costs. A basic income is a far less costly and intrusive way of administering a welfare state that actually guarantees that everyone's basic needs can bet met.

But it guarantees no such thing, because it relies on people to spend the money efficiently and on the things they need, which is quite the assumption. $300 in food stamps is more efficient because that money (in addition to being inserted right back into the economy, which isn't a given otherwise) will, always, be spent on food and only on food. Even if it's traded for other things from other people under the table, that money will be used to buy food and end up on someone's table, somewhere.

The same can be said for other things. What is better, to help someone stay warm in the cold winter? Directly subsidizing their bills, or giving them the equivalent amount of money in a lump sum and hoping they spend money on it? Even if it keeps most people warm, there will always be a certain percentage of people who decide not to use that money for what it was intended for, or for what they need. The same principle is true for other things as well.

As long as welfare recipients aren't spending the money on drugs or alcohol, which the vast majority of them do not, then I don't really see how the money could be spent inefficiently.  Food stamps are useful, of course, but do they always solve the problem?  What if someone has enough food to last them for the week, but not enough money to pay the month's rent?  I don't necessarily object to targeted benefits, but I don't think giving the beneficiaries a sufficient amount of flexibility with their money would hurt anyone.  In fact, I would argue that the recipients are better equipped to spend the money the way they see fit just because they understand their living situations better than the government does.

[Marokai Backbeat]

I don't object to the idea of having a minimum income for certain people, of some sort, merely the idea of replacing the existing welfare state with only a minimum income. You're completely right that food stamps aren't perfect, but they're inflexible for a very important reason: to ensure the most money spent on food as possible and to ensure that money is directly reintroduced into the economy. It's also very easy to measure the effectiveness of the program because of this targeted approach.

I'm not meaning to come off as a "poor people are wasteful and bad with money" thing, because I've been poor most of my life, still am, and my family have always been in dire straits lately. But, people in general don't always make the best decisions with their money in the heat of the moment. 400 dollars of food stamps will always be 400 dollars spent on food, but 400 dollars in cash could easily end up being 40 dollars spent on gas, 30 dollars spent on beer, 20 dollars loaned to a friend, 30 dollars for the kid to go out on a date... things can get whittled away without even thinking about it, and it reduces the intended effect. I admit it's a bureaucratic approach that has its flaws, but I don't think it justifies scrapping the whole of the welfare state instead.

I say none of this to deny the necessity for social work and other kinds of managed aid, but most people living in poverty are capable of making their own financial decisions, and for these people, an envelope full of cash is a hell of a lot more useful than a morning spent waiting in line at the Department of Social Services.

And I don't disagree with this, but if even 95% of people spend the money on exactly what they needed the aid for, that is 5% of people who would've had no choice but to spend the money on food, or rent, or home heating, etc, before. You're trading administrative cost for individual waste. A minimum income can serve a purposes for, as you said, those "envelope of cash" moments, but its best role is in a supplementary fashion.