6 ms·

My vote goes to redistribution of wealth, by means of a progressive tax that starts negative. It is the human thing to do. But it also aligns with economics an

by ozy 10y ago

My vote goes to redistribution of wealth, by means of a progressive tax that starts negative. It is the human thing to do. But it also aligns with economics and politics. Redistribution: because more money at the bottom, means a larger overall market, and I think a more stable economy. Progressive tax: any paying work will always improve your situation. (So people stay motivated to work.) Taxing wealth creation (and to a lesser extend, wealth) makes sense. It needs a society with law and order and property rights. That needs to be payed for. But of course not so much as to discourage wealth creation. Most societies already redistribute wealth. Minimum wage, social programs, health programs, pensions, some form of subsidies. UBI is a more disciplined way of doing this. And just like these programs, you can tune that knob from low to high.

aembleton 10y ago
A negative tax subsidises employers so that they don't have to pay so much. If everyone got the money whether they worked or not then the low wage employer would need to improve the incentive to go and work for them. It would also reduce the amount of administrative work required.
- aninhumer 10y ago
  I think it's an interesting question as to what effect NIT/UBI would have on the labour market. On the one hand, it's a labour subsidy, so employers theoretically don't need to pay as much to offer a decent quality of life as an incentive. But on other hand, people no longer need a job to survive, which reduces the incentive to work. I think the end result here might be a notable improvement in job quality. When you're not struggling to survive, it's much easier to weigh job quality in your decisions, and take less money in exchange for a more pleasant job. In particular, I think a lot of service jobs, could be more enjoyable if companies actually had to care about work environment.
- ozy 10y ago
  A NIT or UBI are basically equivalent. But is easier to see why we give to those who are lesser off. E.g. why give UBI to a millionaire? One of the points is to give power back to those who on the labor market are almost powerless. Both forms would do that. What would the impact be? Likely price for labor goes up. Describing only one of the options as a subsidy is not likely correct.
aninhumer 10y ago
>My vote goes to redistribution of wealth, by means of a progressive tax that starts negative. Just to note, Negative Income Tax is mathematically equivalent to UBI, in that given any NIT scheme you can produce a UBI scheme that results in the same income function. However, I think the framing can make lot of difference here, in terms of expectations, and likely implementation.
- ropeladder 10y ago
  "...and likely implementation." It's true that you can make UBIs and NITs equivalent, but I think it's important to emphasize the implementation part: they are very unlikely to be implemented the same way. This is because, for them to be equivalent, you need the drop-off rate as incomes increase for an NIT to be equal to the increase in taxes on income earners below 2x the UBI level. In other words, an NIT is likely to come with a high marginal "tax" (aka loss of NIT) rate for low earners, while a UBI is likely to keep marginal tax rates for low earners low.
  - aninhumer 10y ago
    Yeah. And additionally, how people get access to the money may also be different. With UBI, most likely people register once and then receive the income without incident indefinitely, and only need to work out taxation if they're employed. Whereas NIT likely requires people to continually submit tax returns stating their lack of income (which is potentially more stigmatising).
    - Chathamization 10y ago
      > Whereas NIT likely requires people to continually submit tax returns stating their lack of income (which is potentially more stigmatising). It also means a lot of people simply won't get the benefits. In the U.S., a lot of people who are eligible for welfare programs never take advantage of them because of the administrative hurtles (to take one example, "Only about 1 in 6 people who are eligible for child care subsidies actually get it"[1]). I'm starting to think more and more that this is by design. Even if you're one of the people that gets the benefits you're eligible for, it's still a burden (imagine having to do your taxes several times a year), and you are subject to the whims of policy makers that want to beat up on you for political credits. So you had some states requiring that welfare recipients get drug testing. If you had a similar requirement for Social Security, people would be livid and through the politicians out on the street. But when this kind of stuff is done to the poor, a lot of people have the attitude that the impoverished deserve to be treated badly. [1] www.npr.org/2016/08/21/490822086/the-financial-trials-of-child-care-for-working-families
gizmo 10y ago
The negative income tax is not a progressive idea. It was originally proposed by Milton Friedman as a way to dismantle the social safety net and get rid of the minimum wage, food stamps, social programs, pensions, and all those other programs previous generations have fought and died for. What do people get in exchange? Well, a bunch of money, but nowhere near enough to buy all the services they just lost from the free market. A single mother with 2 children needs more money to make ends meet than a single student in their 20s. Subsidies take that into account, the negative income tax does not. People with a physical or mental handicap need assistance. The negative income tax has abolished the programs that help you, so good luck. Pensions? Same. If you've not invested wisely during your working years you'll have to eat dogfood when you're old, because social security is gone. The problem with the negative income tax is that there's no way to make the math work, because you can't raise the minimum amount every citizen gets high enough so that every citizen can live a dignified life with that amount of money. Not even when you tax the highest earners at 90% does the math work. The special aid programs we have today exist for a reason: they specifically help vulnerable groups in society, who would otherwise be in desperate straits. Make no mistake: the proponents of the negative income tax want to shrink the government to the size where it can be drowned in a bath tub. It's a far right idea that, if executed, would have horrific consequences for the poor. I urge people on the left of the political spectrum to stop and do some napkin math on how the negative income tax would end up redistributing wealth.
- deleted 10y ago
  [deleted]
- ozy 10y ago
  "Subsidies take that into account, the negative income tax does not." In my country there are both subsidies, and tax breaks for such situations. Is anything I said implying we abolish that? I would suggest it translates to more negative tax for such situations. "It's a far right idea that, if executed, would have horrific consequences for the poor." It is wealth redistribution. Which is not a far right idea. Any kind of wealth redistribution is good for those who have little. (Unless you redistribute it only to the rich, but that is not commonly understood with the term.) But you imply it does not? Would you mind doing that "napkin" math and show us what you mean?

by ozy 10y ago

aembleton 10y ago

A negative tax subsidises employers so that they don't have to pay so much. If everyone got the money whether they worked or not then the low wage employer would need to improve the incentive to go and work for them. It would also reduce the amount of administrative work required.

aninhumer 10y ago
I think it's an interesting question as to what effect NIT/UBI would have on the labour market. On the one hand, it's a labour subsidy, so employers theoretically don't need to pay as much to offer a decent quality of life as an incentive. But on other hand, people no longer need a job to survive, which reduces the incentive to work. I think the end result here might be a notable improvement in job quality. When you're not struggling to survive, it's much easier to weigh job quality in your decisions, and take less money in exchange for a more pleasant job. In particular, I think a lot of service jobs, could be more enjoyable if companies actually had to care about work environment.
ozy 10y ago
A NIT or UBI are basically equivalent. But is easier to see why we give to those who are lesser off. E.g. why give UBI to a millionaire? One of the points is to give power back to those who on the labor market are almost powerless. Both forms would do that. What would the impact be? Likely price for labor goes up. Describing only one of the options as a subsidy is not likely correct.

aninhumer 10y ago

>My vote goes to redistribution of wealth, by means of a progressive tax that starts negative. Just to note, Negative Income Tax is mathematically equivalent to UBI, in that given any NIT scheme you can produce a UBI scheme that results in the same income function. However, I think the framing can make lot of difference here, in terms of expectations, and likely implementation.

ropeladder 10y ago
"...and likely implementation." It's true that you can make UBIs and NITs equivalent, but I think it's important to emphasize the implementation part: they are very unlikely to be implemented the same way. This is because, for them to be equivalent, you need the drop-off rate as incomes increase for an NIT to be equal to the increase in taxes on income earners below 2x the UBI level. In other words, an NIT is likely to come with a high marginal "tax" (aka loss of NIT) rate for low earners, while a UBI is likely to keep marginal tax rates for low earners low.
- aninhumer 10y ago
  Yeah. And additionally, how people get access to the money may also be different. With UBI, most likely people register once and then receive the income without incident indefinitely, and only need to work out taxation if they're employed. Whereas NIT likely requires people to continually submit tax returns stating their lack of income (which is potentially more stigmatising).
  - Chathamization 10y ago
    > Whereas NIT likely requires people to continually submit tax returns stating their lack of income (which is potentially more stigmatising). It also means a lot of people simply won't get the benefits. In the U.S., a lot of people who are eligible for welfare programs never take advantage of them because of the administrative hurtles (to take one example, "Only about 1 in 6 people who are eligible for child care subsidies actually get it"[1]). I'm starting to think more and more that this is by design. Even if you're one of the people that gets the benefits you're eligible for, it's still a burden (imagine having to do your taxes several times a year), and you are subject to the whims of policy makers that want to beat up on you for political credits. So you had some states requiring that welfare recipients get drug testing. If you had a similar requirement for Social Security, people would be livid and through the politicians out on the street. But when this kind of stuff is done to the poor, a lot of people have the attitude that the impoverished deserve to be treated badly. [1] www.npr.org/2016/08/21/490822086/the-financial-trials-of-child-care-for-working-families

gizmo 10y ago

The negative income tax is not a progressive idea. It was originally proposed by Milton Friedman as a way to dismantle the social safety net and get rid of the minimum wage, food stamps, social programs, pensions, and all those other programs previous generations have fought and died for. What do people get in exchange? Well, a bunch of money, but nowhere near enough to buy all the services they just lost from the free market. A single mother with 2 children needs more money to make ends meet than a single student in their 20s. Subsidies take that into account, the negative income tax does not. People with a physical or mental handicap need assistance. The negative income tax has abolished the programs that help you, so good luck. Pensions? Same. If you've not invested wisely during your working years you'll have to eat dogfood when you're old, because social security is gone. The problem with the negative income tax is that there's no way to make the math work, because you can't raise the minimum amount every citizen gets high enough so that every citizen can live a dignified life with that amount of money. Not even when you tax the highest earners at 90% does the math work. The special aid programs we have today exist for a reason: they specifically help vulnerable groups in society, who would otherwise be in desperate straits. Make no mistake: the proponents of the negative income tax want to shrink the government to the size where it can be drowned in a bath tub. It's a far right idea that, if executed, would have horrific consequences for the poor. I urge people on the left of the political spectrum to stop and do some napkin math on how the negative income tax would end up redistributing wealth.

deleted 10y ago
[deleted]
ozy 10y ago
"Subsidies take that into account, the negative income tax does not." In my country there are both subsidies, and tax breaks for such situations. Is anything I said implying we abolish that? I would suggest it translates to more negative tax for such situations. "It's a far right idea that, if executed, would have horrific consequences for the poor." It is wealth redistribution. Which is not a far right idea. Any kind of wealth redistribution is good for those who have little. (Unless you redistribute it only to the rich, but that is not commonly understood with the term.) But you imply it does not? Would you mind doing that "napkin" math and show us what you mean?