chrisr@hcrvax.UUCP (Chris Retterath) (08/28/84)
In reply to Dave Sherman's (dave@utcsrgv.UUCP) reply to my original note (!),
I still beleive the system is all wrong. Dave raises a good point when
he mentions:
~ The only way to have you not receive a baby bonus in the first place,
~ or only receive half as much, would be for the Wealth and Hellfire
~ Canada people to have records of your current income, so they know
~ how much to send you.
My reply to this is, of course, why bother? A negative income tax would
accomplish the same thing, albeit without a sum coming in monthly.
Now, it wouldn't look as much like a "bonus", but then it isn't a bonus
in the sense that people do not have more babies so that they can collect
an extra $30.00 a month! The "bonus" will not even keep a baby in diapers!
(Dave calculates that at maximum Ontario tax levels, 50% of the income is
taxed -- in other words, once a month a cheque arrives for $30.00, and at
the end of the year, out of the total $360.00, $180 is taxed away.
All that work to give someone $180.00! *I* call that silly!!)
This is how most proposed negative taxes are supposed to work:
if you had less than a certain amount in income that year, you would get
a grant to bring up your income to that minimal figure. If you had more,
you would pay tax. The whole thing is administered by Nat'l Revenue,
and calculated when the income tax form is completed.
Notice, now, that if that minimal income figure was set to the
so-called "poverty line", then Canada would have solved poverty; we would no
longer have any poor people! All those silly welfare giveaways could stop,
(but note: I consider equalization payments, subsidized housing, CPP,
GIS, et cetera, to be "welfare"). There are studies that show the cost
to be lower, given that the program is administered in one department
in one objective review of income ONLY. And think what it does for the poor!
Now they are not penalized for trying to get a job, losing their welfare
privileges, only to have to re-apply (and wait several weeks) if that job
is lost. Now they are not penalized for remaining married -- it is long been
the case that if you were a welfare father, you could do MORE for your
family by faking an abandonment, allowing your wife to apply for welfare
as a single mother with dependents, and then surreptiously send her money
from your continued welfare or job monies!
Now they are not penalized for owning a car/house/et cetera, as they
currently are when applying for welfare.
The final item of discussion: the universality of our social systems.
Someone please explain to me why it better to give everyone a taxable
benefit at considerable cost, and then spend more money trying to tax
back most or all of the benefits? Is it supposed to feel more "fair"?
I guess most people do not realize the costs of administering such programs,
a cost which of course is felt in a higher tax load.
On our own heads, be it!
--
Chris Retterath
{decvax,utcsrgv,utzoo}!hcr!hcrvax!chrisrthomson@uthub.UUCP (Brian Thomson) (08/28/84)
Such year-end compensation schemes cannot work, because the people
who really need that $30 a month need it now, not in a lump next April.
--
Brian Thomson, CSRI Univ. of Toronto
{linus,ihnp4,uw-beaver,floyd,utzoo}!utcsrgv!uthub!thomsondave@utcsrgv.UUCP (Dave Sherman) (08/28/84)
In article <1068@hcrvax.UUCP> chrisr@hcrvax.UUCP (Chris Retterath) writes:
~| In reply to Dave Sherman's (dave@utcsrgv.UUCP) reply to my original note (!),
~| I still beleive the system is all wrong. Dave raises a good point when
~| he mentions:
~|
~| ~ The only way to have you not receive a baby bonus in the first place,
~| ~ or only receive half as much, would be for the Wealth and Hellfire
~| ~ Canada people to have records of your current income, so they know
~| ~ how much to send you.
~|
~| My reply to this is, of course, why bother? A negative income tax would
~| accomplish the same thing, albeit without a sum coming in monthly.
~| Now, it wouldn't look as much like a "bonus", but then it isn't a bonus
~| in the sense that people do not have more babies so that they can collect
~| an extra $30.00 a month! The "bonus" will not even keep a baby in diapers!
The "sum coming in monthly" is important to a lot of people, however.
Do you know how many women there are out there who have to rely on
the baby bonus cheque for groceries a lot of the time? Some of these
women have husbands who spend their paycheques and give their wives
nothing. Sad but true, unfortunately.
~| (Dave calculates that at maximum Ontario tax levels, 50% of the income is
~| taxed -- in other words, once a month a cheque arrives for $30.00, and at
~| the end of the year, out of the total $360.00, $180 is taxed away.
~| All that work to give someone $180.00! *I* call that silly!!)
Yes, but how many people have a taxable income (after all deductions)
of over $59,424? That's at least $64,000 before tax, usually more.
For the women who depend on that monthly cheque, there's usually no
tax at all, because they make next to nothing.
Also, it's $30 per child. If you have 7 kids (like one of our
neighbours), you get $210 a month, or $2,520 per year, which is
a bit more than $180.
~|
~| This is how most proposed negative taxes are supposed to work:
~| if you had less than a certain amount in income that year, you would get
~| a grant to bring up your income to that minimal figure. If you had more,
~| you would pay tax. The whole thing is administered by Nat'l Revenue,
~| and calculated when the income tax form is completed.
BUT. If you had no income during the year, a big cheque in July is
no use. You starved during the year, practically. And many poor
people will take that big cheque in July and blow it all at once.
A "grant to bring up your income" only works if it arrives regularly.
Anyway, that is how the Guaranteed Income Supplement for seniors works.
~|
~| Notice, now, that if that minimal income figure was set to the
~| so-called "poverty line", then Canada would have solved poverty; we would no
~| longer have any poor people! All those silly welfare giveaways could stop,
~| (but note: I consider equalization payments, subsidized housing, CPP,
~| GIS, et cetera, to be "welfare"). There are studies that show the cost
~| to be lower, given that the program is administered in one department
~| in one objective review of income ONLY. And think what it does for the poor!
~| Now they are not penalized for trying to get a job, losing their welfare
~| privileges, only to have to re-apply (and wait several weeks) if that job
~| is lost. Now they are not penalized for remaining married -- it is long been
~| the case that if you were a welfare father, you could do MORE for your
~| family by faking an abandonment, allowing your wife to apply for welfare
~| as a single mother with dependents, and then surreptiously send her money
~| from your continued welfare or job monies!
~| Now they are not penalized for owning a car/house/et cetera, as they
~| currently are when applying for welfare.
~|
Much of what you say makes sense, except that if people have a house and
car, they probably should sell those before they go on welfare.
~| The final item of discussion: the universality of our social systems.
~| Someone please explain to me why it better to give everyone a taxable
~| benefit at considerable cost, and then spend more money trying to tax
~| back most or all of the benefits? Is it supposed to feel more "fair"?
~| I guess most people do not realize the costs of administering such programs,
~| a cost which of course is felt in a higher tax load.
~|
As I said earlier, it's cheaper to have DNR recover a portion of the
baby bonus when tax is collected. Actually, to implement what you
want, it wouldn't be unreasonable to have the baby bonus work like
UIC - when you file your tax form, if you got UIC and had a high
income during the year, you have to pay a chunk of it back (not
just have it included in your income for tax purposes, but actually
pay it back).
~| On our own heads, be it!
~| --
~| Chris Retterath
~| {decvax,utcsrgv,utzoo}!hcr!hcrvax!chrisr
Dave Sherman
--
{ allegra cornell decvax ihnp4 linus utzoo }!utcsrgv!davechrisr@hcrvax.UUCP (Chris Retterath) (08/30/84)
Brian Thompson and Dave Sherman have described the problem with a
"once-yearly" adjustment in a negative income tax system. But the fix
is so easy I'm surprised I even have to mention it; namely, provide
a _service_ to people that provides a monthly sum *in exchange* for the
monies that are expected at the end of the year!
The service could be provided by a credit company, a bank, or,
for you socialists, a government department. Note that the hombre desiring
such service should probably come in as though he/she were getting a loan,
which in effect is what he/she is getting.
Note that there is already a similiar service for people who need their
income tax refunds _immediately_! Of course, people who can afford to wait
complain that those poor people who need the money NOW are being ripped off;
they forget that any service must cost money, and that they are of course
welcome to provide such a service themselves at a lower cost if they think
it can be done!
As for the argument that people cannot be trusted not to "blow"
all the money if it comes in at once, well, that is a pretty patronizing
attitude to have about someone else. I suppose you could even satisfy this
concern by making a negative tax payment automatically releasable in
monthly installments.
(Interesting that the gov't collects payroll tax as the payroll is paid;
supposedly as a service so you won't have to scramble for the year end
income tax payments! Wouldn't you just love to have access to that paid
tax all year, instead of getting a refund in early summer! Of course, they
need the money to run the damn system anyways, so no flames about this!)
--
Chris Retterath
{decvax,utcsrgv,utzoo}!hcr!hcrvax!chrisrjeff@dciem.UUCP (Jeff Richardson) (08/30/84)
For those of you who think it's silly to pay out a baby bonus and then take
back a large chunk of it as income tax, how about this one: federal
government departments have to pay federal sales tax! The only reason I
can see for this is to make it look to the departments like they are being
given more funds by initially allocating them more money and then quietly
taking back some of it to be allocated again.
--
Jeff Richardson, DCIEM, Toronto (416) 635-2073
{linus,ihnp4,uw-beaver,floyd}!utcsrgv!dciem!jeff
{allegra,ihnp4,linus,decvax}!utzoo!dciem!jeffmason@utcsrgv.UUCP (Dave Mason) (08/30/84)
I have been reading all this stuff, and feel obligated to throw in my 3
cents worth.
If the country has the wealth to provide everyone with an adequate standard
of living (I do NOT mean food and a hostel to sleep in, and I do NOT mean
3000 sq. ft. houses and 3 cars per family) which I would argue Canada does,
the obvious approach is to pay everyone a Citizenship Salary of a reasonable
level (say $10,000) in bi-weekly installments. Then any income you made
over and above that would be taxed. No loopholes, no exemptions. This
way we would not even need to fill in tax forms at the end of the year
unless we were self-employed, because the tax we paid would be the tax we
owed.
This would be extremely cheap and simple to administer, as well as removing
the stigma implied by the terms Welfare, UIC, or even "negative" tax.
It would also save a lot of money as all those civil servants moved from making
30,000 a year to making 10,000 a year. Not that it gives them the oppurtunity
and the means to decide what they can do best, and go out and provide a
service that other people are willing to pay for. It also means that
artists and writers can do what they want, presumably also to our general
benefit.
The only real administrative costs of all this are deciding who is eligible,
and how much the amount should increase every year. The second part is easy
to state, if not so easy to implement: The Citizen Salary should increase
to match the increase in the wealth of the nation. How you measure this is
probably a major problem.
The first part is trickier: do you pay only citizens, landed immigrants?
adults? children?
Comments welcome!
--
Usenet: {dalcs dciem garfield musocs qucis sask titan trigraph ubc-vision
utzoo watmath allegra cornell decvax decwrl ihnp4 uw-beaver}
!utcsrgv!mason Dave Mason, U. Toronto CSRG
CSNET: mason@Toronto
ARPA: mason%Toronto@CSNet-Relay