4 ms·

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

svachalek 6y ago
This is more or less what happens with tipping so I would assume it also happens here.
- madeofpalk 6y ago
  Yeah, I don’t think extending that is a positive thing. It’s like taking the worst part of “tipping in the US” and running with just that’s.
- edgyquant 6y ago
  A lot of states regulate tips so the employer has to compensate an employee whose tips equal less than the minimum wage for the hours worked.
- dragonwriter 6y ago
  > This is more or less what happens with tipping The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT. If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.
Dylan16807 6y ago
The fact that everyone will get the negative tax even if they stay home (or volunteer, or work on a passion project). If you're only going to pay an extra dollar per hour, nobody will take the job.
dragonwriter 6y ago
> I’m not all that educated on negative tax rate Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.) (EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.) > what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference? People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)
cosmojg 6y ago
Couldn't that be continuously offset by increasing/decreasing taxes at the top? I imagine a self-regulating system might be difficult, but not impossible.
- bravo22 6y ago
  You would actually have a flat tax across the system ideally. Eliminates unproductive capital deployment to reduce tax burden. You take X% off the top of the economy and distribute it to everyone who needs it on a sliding scale basically below a certain income level Y.
bravo22 6y ago
The government doesn't foot the bill. People and businesses do. We pay taxes. Government has no money. The transfer payment is taken from the entire economy through a tax. A slice off the top. If a business has higher profits it would also pay larger portion of that transfer to low income persons. A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. Then it is in the interest of everyone paying taxes to figure out ways to reduce costs of living.
- michaelmrose 6y ago
  >A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. If you pick a value too low it does not actually keep someone alive, fed, and housed. If you pay enough to live half the shitty jobs everyone hates become not worth doing.
- madeofpalk 6y ago
  I just think that businesses should pay employees a living wage to do work.

svachalek 6y ago

This is more or less what happens with tipping so I would assume it also happens here.

madeofpalk 6y ago
Yeah, I don’t think extending that is a positive thing. It’s like taking the worst part of “tipping in the US” and running with just that’s.
edgyquant 6y ago
A lot of states regulate tips so the employer has to compensate an employee whose tips equal less than the minimum wage for the hours worked.
dragonwriter 6y ago
> This is more or less what happens with tipping The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT. If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.

Dylan16807 6y ago

The fact that everyone will get the negative tax even if they stay home (or volunteer, or work on a passion project). If you're only going to pay an extra dollar per hour, nobody will take the job.

dragonwriter 6y ago

> I’m not all that educated on negative tax rate Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.) (EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.) > what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference? People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)

cosmojg 6y ago

Couldn't that be continuously offset by increasing/decreasing taxes at the top? I imagine a self-regulating system might be difficult, but not impossible.

bravo22 6y ago
You would actually have a flat tax across the system ideally. Eliminates unproductive capital deployment to reduce tax burden. You take X% off the top of the economy and distribute it to everyone who needs it on a sliding scale basically below a certain income level Y.

bravo22 6y ago

The government doesn't foot the bill. People and businesses do. We pay taxes. Government has no money. The transfer payment is taken from the entire economy through a tax. A slice off the top. If a business has higher profits it would also pay larger portion of that transfer to low income persons. A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. Then it is in the interest of everyone paying taxes to figure out ways to reduce costs of living.

michaelmrose 6y ago
>A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. If you pick a value too low it does not actually keep someone alive, fed, and housed. If you pay enough to live half the shitty jobs everyone hates become not worth doing.
madeofpalk 6y ago
I just think that businesses should pay employees a living wage to do work.