Between 1974 and 1979, the Canadian government tested a program called Mincome in Dauphin, Manitoba, a town of fewer than 10,000 residents. Under Mincome, a family with no sources of income would receive 60% of the low-income cut-off -- a type of poverty line that Canada uses. Every dollar in income earned reduced the benefit by $0.50.
Let's be more generous than that. Let's say everyone needs at least $27,000 per year. 150,000,000 people make less than $27,000 a year. Let's assume they make an average of $13,500 a year. A reverse income-tax would need to double that to allow everyone to pay for the cost of living. So, we need to budget for $2.1 trillion. If we decreased our military budget to the per capita rate of developed countries we get $1.14 trillion. (We spend $1.3 trillion, most developed countries spend $550 per person, or $0.16 trillion for a country the size of the U.S.). If we closed other means-tested welfare programs, we get $0.93 trillion. If we closed social security, we get $0.78 trillion. If we closed corporate tax loopholes, we get $0.15 trillion. Who knows what we'd get if we reinstated the tax rates from the '50s through the '70s, or if we stopped spying on everyone, or if we stopped imprisoning so many people for so long, but we already have more than enough: $3 trillion. I think we the reason we aren't already doing this is because of our priorities, not because we can't afford to.
One problem with your scenario. It makes too much sense.
There is much to like in this proposal. Directing revenue toward workers instead of bombs is appealing. But what will we say to the unemployed, disabled and elderly, who now depend on means-tested welfare programs to get by? They get nothing in this proposal, and will lose the housing, medical, food and retirement benefits they receive now.
This is very interesting. I really want to see it work. I'm thinking, what about not supplying mincome to zero-income households, but offering the cash once they're able to hold any job below whatever the poverty-line income rate is. As long as they're working, they'll get the money. Any resulting income surplus over the poverty line would go straight to health care and retirement for them? edit: water, this would get rid of the Welfare Trap as well, I think.
So, you're unemployed? Sorry to hear that. Say, why don't you work for me, feeding my cat? I'll pay you a dollar a day. And you'll agree to split your Mincome checks with me 50-50, right? After all, we're partners. And if you have any unemployed friends, let me know ... I can always get more cats.what about not supplying mincome to zero-income households, but offering the cash once they're able to hold any job
Ok, I see you. Fraud is hard to fight against. Then perhaps there should be an additional standard to the employment caveat. Maybe, the employee needs to be verified before the subsidy is issued, I have no idea. Either way a money laundering scheme is a money laundering scheme, if feds are alert enough they'll bust them. You also bring up the underlying problem that simply offering a cold hard cash Mincome is far too idealistic, which I mentioned in this thread and completely agree with. I was sorta letting that slide and offering a "what if." LET ME HOPE wasoxygen!
Your goal may be to discourage lazy freeloaders, but it will be hard to distinguish them from people who are unemployed for reasons we would not hold against them. And even if we can clearly identify fraud, and then divert some funds we planned to give to poor households toward anti-fraud enforcement, people will have a reason to try and beat the system. When incentives change, behavior changes. For example, say a wealthy employer now pays employees $30,000 per year. A guaranteed income program is enacted, so all the employees will now collect $12,000 per year from the program. The employer has an incentive to respond to this change, by cutting salaries to $20,000 (or quietly dismissing and re-hiring at the new rate). The employees now receive $32,000 while doing the same work, but the employer has benefitted much more. If this case is realistic, then the program could transfer wealth from less wealthy taxpayers to wealthier employers. We should be suspicious of such programs.Fraud is hard to fight against.
Right, but the bigger point is that unintended consequences are important and can be hard to anticipate.LET ME HOPE
Hoping is free! I hope plenty. But hoping doesn't help the poor much. We should do the work to find evidence that our actions will have the outcomes we hope for before moving forward.
you're absolutely right. It seems like in this closed system if you do actually try to make changes you'll offset an entire structure that just offers a dozen new problems. I suppose, strong government assesses these negative outcomes and eats a few if it's at least a better situation than before. I mean, That's a problem. But, that's a problem that becomes reality once we've started an operation that will offer support to all of the American households that fight under the poverty line. Maybe it's worth it for the time being. But of course that's not very sensible thinking in the long run and I get what you're saying. Hmph, I thought I solved world hunger there for a moment >:(Your goal may be to discourage lazy freeloaders, but it will be hard to distinguish them from people who are unemployed for reasons we would not hold against them.
...The employees now receive $32,000 while doing the same work, but the employer has benefitted much more. If this case is realistic, then the program could transfer wealth from less wealthy taxpayers to wealthier employers.
No, it doesn't, but it at least puts the people's hearts in the right place, which is better than the alternative, I suppose. Here's an actual way to help the poor straight away: Do away with the payroll tax. It currently sits at 12.4% and it's regressive, which even flat tax advocates should be against. I don't think most people are even aware that 12% of their wages are being skimmed before they pay a dime of income tax. IMO, the payroll tax should be obliterated tomorrow, and an offsetting increase in income tax should shore up the rest. The poorest people are paying almost the same tax rate as is levied on capital gains. Some 3/4 people pay more in payroll tax than in federal income tax. There's no 47% when it comes to the payroll; it's just a dead weight on people's income. To me, this is unjustifiable....hoping doesn't help the poor much.
I don't know too much about taxes but that money is more or less going to the same place, which redistributes it right? I mean, if you eliminated a certain tax Congress would scramble to redefine how much of your income is taxable and increase the income tax; they'd screw with Roth 401(k) restrictions and up the tax on contributions to your traditional 401(k). They'd justify it by saying "aw we lost all that cash and we gotta make it up, to fund your healthcare/defend our territory/save GM" and I don't see what difference wiping out one tax would make. They're all different sewage pipes leading to the same dump.To me, this is unjustifiable.
It just occurred to me as well that this is another policy that hurts working families, as a one income of, say, $200,000 is taxed less than a two income household of $200,000 where the monies are relatively evenly split between spouses. The so called "marriage penalty" gets worse...
Well, if I make $200k, then my payroll tax is $117,000 * 12.4% = $14,508, which is a rate of 7.25%. My wife is a housewife who makes 0, so combined we pay 7.25%. If, on the other hand, I make $100,000 and my wife makes $100,000, then our payroll tax burden is the full 12.4%, or $24,800. Income tax kind of works the same way for married people. If you make a similar amount of money, then you pay a lot (actually, more than you would pay individually, if you can believe that; not sure what genius came up with that one). If one spouse makes significantly more than the other, then you potentially get a large break. It's a terribly unfair system, IMO. But everything looks unfair when you're the one getting fucked.
Ah okay I got you, actually now that you mention this marriage caveat I'm beginning to remember reading about this long before I understood any of it. Oh well. Yeah I think that's the "unfair" bit of things being unfair.It's a terribly unfair system, IMO. But everything looks unfair when you're the one getting fucked.
There's a world of difference between income tax and payroll tax. Income tax is progressive, and payroll tax is regressive. The payroll tax burdens the poor proportionally far more than the wealthy. The revenue it generates should be made up with a commensurate increase in the income tax, thereby reducing the tax burden on the poor. 12.4% is a shitload of money when you're making $20,000/yr. There is no standard deduction for the payroll tax, no exemption; it just is...until you make $117,000 or thereabouts. Above that level you cease to pay, because payroll is earmarked for social security, the theory being that the benefit is capped, so why shouldn't the contribution. That theory doesn't really hold water, because many people don't directly benefit from all sorts of services to which they contribute. In effect someone making $234,000 only pays 6.2%, and so on (and someone deriving their income from capital gains--the wealthiest, typically--pays 0%). Regressive taxes are a type of upward redistribution, and pretty much all economists from all sides of the political spectrum are against them. It's a universally despised way of taxation among all but the most ardent defenders of the wealthy.
Jesus christ. So what you're saying is, people making over say $117,000 are taxed less, and the justification is that they won't be needing welfare so they shouldn't have to pay for it?There is no standard deduction for the payroll tax, no exemption; it just is...until you make $117,000 or thereabouts. Above that level you cease to pay, because payroll is earmarked for social security, the theory being that the benefit is capped, so why shouldn't the contribution.
You got that right. I'm not taught anything about this, I don't know anyone that is. I can tell you how to do okay on the SATs and that's just about all the applicable knowledge I was taught in school. Thanks for the explanation anyway, that's actually insane.Civics education is clearly in the shitter when even a well informed youngster like yourself doesn't know this.
I almost think that it's intentionally obscured. It doesn't show up on your 1040 form calculations in an obvious way, and half of the tax is paid by your employer on your behalf. Therefore, it's not staring you in the face like it should be. And the cap isn't well advertised by the media, and politicians have an incentive not to tell people they're getting fucked.
What I mean to say is that in a time when most developed countries have a working publicly funded health care system, the U.S. is the exception. Sure, there are disadvantages such as higher taxes and longer wait times, but this system is good for most people. Is Obamacare working? Well, I'm comparing it to Canadian healthcare right now, and to me, it is not working. Some people are uninsured, not everyone has equal access to services, it's not controlling the cost of healthcare, and states have wayyy too much control over the system. I guess this is the fundamental difference between US government and Canadian government, which is more centralized. But this is also why this welfare system probably won't work in the US, at least not at a large scale. It should be possible under miraculous circumstances (e.g. a very popular President, widespread support, war), or maybe at the state level. But that's beside the point. It's 2014. They've had a long time to fix healthcare, and they could have ripped off either the Canadian system or the Scandinavian system. They didn't. I don't think they can. So if healthcare doesn't work, and it sounds like a pretty reasonable idea, what would the Republicans think about this welfare system?
Gasp! We're spending money to let the government control our lives!
This subject has prompted some good discussions: Basic Income Means Basic Freedom and 5 reasons to consider a no-strings-attached, basic income for all Americans I welcome more discussion, especially when based on facts and figures. We should be careful about what the numbers measure, particularly if we are talking about households, workers, or individuals. Households in the United States: 117,538,000 Wage earners: 150,398,796 Population: 313,900,000 The article points out that $11,000 per household per year would help some, but still leave many short of MIT's "living wage" level. A linked article calculates that giving $12,000 per individual per year, still not F-you money, would cost one or two trillion dollars, more than is currently being spent on all anti-poverty programs (federal, state and local).
I still say nay, because of how lazy I've known myself to be when no one holds a gun to my head.
It's very idealistic to think that giving a household the cash will give them the opportunity to organize it all and use the money maturely on their own. When you're living check to check, for many people that means that they don't have legitimate savings and from experience, you're always catching up to insurmountable expenses that seem beyond your control. Let's be honest, it is safe to assume that a large amount of people that would qualify for the minimum income would not be able to handle their money enough to supply themselves savings for health care, let alone retirement. Now, if Mincome was to substitute govt-subsidized health care, that means those people would, well, not have govt-subsidized health care, meaning they would not have any health care at all. And that is very bad for the society as a whole, not just the individual.
I don't think Mincome though is the end-all-be-all to guaranteed income plans, just a place to start thinking of ideas. There is a tremendous amount of waste in bureaucracy, giving cash directly to people allows them the ability to individually tailor plans to their own needs. You could even set something up of a transitionary period where recipients could chose between the current welfare system(food stamps, etc.) or guaranteed income. We also have to consider that our current Welfare system in the US suffers from a phenomena known as the "Welfare Trap" where recipients are essentially penalized for trying to seek higher forms of income, as it puts them in danger of losing welfare benefits, resulting in a net loss of benefits received. The Welfare Trap is a real thing that plagues our welfare system(as well a bureaucracy waste) and is a symptom of an engineered plan that doesn't effectively complete the objectives it was designed to fix. So regardless if we switch to a guaranteed income system or not, our current Welfare system is something we should not settle for, as it has obvious areas that require improvement.
No doubt, which is why despite the blatant risks I think we should try to at least test-run any option we can, a modified Mincome concept included. Even combining them to include health care as an automatic deduction from the income value just like a company will do for its employees. I don't know, I think if we're failing anyway we may as well take the risk of crashing a couple projects and test-runs in the hopes of finding something effective.So regardless if we switch to a guaranteed income system or not, our current Welfare system is something we should not settle for, as it has obvious areas that require improvement.
$25,000/year/person = $7.5 trillion/year. We're not spending that much on housing, health care, food stamps, etc.
$25,000 x 300,000,000 = $7.5 trillion Where is $11,000 per year a living wage?? So let's say you only had 1/3 of the country working below $25,000/year. Even with the sliding scale, that's just too much money. And you think there won't be bureaucracy involved in distributing this money? I like nowaypablo's ideas, as per usual. Edit: Sorry to be a stickler... you can just say "50 cents", as ".50 cents" implies half a cent. ".50 dollars" is acceptable though. I'm an asshole when it comes to units... hah, you can quote me on that.