IDS 1: A Negative War on Poverty Act

[Maxwell]

I've embraced the Libertarian arguement for the negative income tax and have decided to change the way welfare works in the IDS. I'm imposing a negative income tax of -1% on the poorest individuals, allowing them to get some of their hard work back so they can pay the bills. This is far more efficient than the old ways of welfare where we put it through a lot of government waste and obstacles. I put my trust in the individual ahead of the Government.

[Maxwell]

yes Sjoyce, and you make a good point. I suppose we could have a scaling effect? 1% of 25,000 is $250, so suppose something like that or a little bit higher is the maximum for poor families, and it scales so it either stays the same or lowers as families become closer and closer to solvency?

[Maxwell]

Avoiding cliffs in programs. That was Shua's forte I would point out. He did the healthcare formula with such an approach. Perhaps we could bring him in on this matter.

I'll message him about it.

[Maxwell]

That sounds like an easy solution, I will get around to writing the formula tomorrow.

[Maxwell]

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Not sure if the phrasing is right, but I think this is the gist of what shua was saying.

[Maxwell]

Yes, it looks like that would work.

Of course if you wanted to go for a more generous benefit you could do this all with one formula:  (.058)(Taxable Income - $25000)

I could, but then again, the issue is if it blows too much of a whole in our budget.

[Maxwell]

Is there a way we can put both this and the Small Business Growth bill on hold until we get GM estimates so we can discuss other bills?

[Maxwell]

That's a good idea, I'll message Sirnick both bills again.

[Maxwell]

Okay we got something of a GM estimate.

Now one area I will need to change is the portion of the bill that mentions the Basic Compassion Act, because otherwise we add $27.7 Billion to the cost. Wording it different would save us the full amount of welfare spending, which is about $8.6 Billion. But here's income tax revenue before and after this legislation -

Income Tax Before - $57.15 Bil
Income Tax After - $48.65 Bil (Income Taxes from incomes above $25,000) - $8.5 Bil (Negative Income Taxes) = $40.15 bil
Cost of Negative Income Tax Program before elimination of Welfare Spending = $17 Bil
Eliminating welfare spending= $8.6 Bil
Total Cost of Negative Income Tax bill = $8.4 Bil

So we need to find a way to close the gap in this bill.

This is my intrepretation of the GM's numbers if the bill is edited properly.

So here's my first amendment to make this more cost effective.

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