Talk:Negative income tax
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[edit] Criticism
It seems to me that some account of more serious criticism of the negative income tax needs to be represented. There must be scholarly literature on the effect on the concentration of wealth such a proposal would certainly have, as well as the deskilling effects. Not to mention the massive budget deficits it would create in (at least) the short term! Most importantly, any proposal that favors the creation of low-wage work to the extent of this kind of negative tax would certainly have a massive effect on the labor market. "Capital intensive" industries alone aren't the issue..."human capital" is also involved here.
An example of the problem (not just in this article, but to some degree in the larger discussion of this topic): The link at the bottom to a "critique of negative income tax" in fact critiques an entirely different model of the tax--one which does *not* include the guaranteed minimum income but instead implements a negative proportional tax (i.e. one phased in according to a "negative tax schedule"--a tax credit). This is not a critique of the model presented here, but a critique of an entirely different model of taxation.
A real critique would involve some realistic assessment of the net effects of the model that is actually presented here. K McG
Where did the first description of the NIT come from? Friedman and the critique use the model I posted just now.
- "There must be scholarly literature on the effect on the concentration of wealth such a proposal would certainly have, as well as the deskilling effects. Not to mention the massive budget deficits it would create in (at least) the short term! Most importantly, any proposal that favors the creation of low-wage work to the extent of this kind of negative tax would certainly have a massive effect on the labor market." I am not certain I follow. "Massive budget deficits"? Doesn't that make a lot of assumptions about what the rates would be? Are the precise 25% and $10,000 number integral to the proposal, or place-holders? I thought this proposal was a type of taxation, not a rate. Also I don't really know what "deskilling" means. Boris B 22:46, 25 August 2006 (UTC)
"Friedman feared high subsidy rates as those" ... did the author mean 'Friedman feared higher subsidy rates than those....'? "A flat rate income taxation with tax exemption implements a negative income tax as well as it maintains an actual tax rate progression at extremely low administrative cost: This is achieved by paying a tax on the tax exemption to all taxpayers, e.g. in monthly payments." I really don't understand the last sentence but I'm not sure how to phrase a question. Is the "with tax exemption" language a modification to the NIT proposal, or an integral part? I didn't think you needed to tax any tax exemption to get an effective tax rate progression. Boris B 22:56, 25 August 2006 (UTC)
'Concentration of wealth'. Why should NIT concenrate wealth? 'Deskilling' Why? 'Creation of low wage work' Again, why?
NIT redistributes income. That is all.
David Erskine
124.176.126.98 07:14, 26 October 2007 (UTC)
NIT disperses money throughout society. It certainly does not conentrate wealth. Skilled people continue in their skilled, well paid jobs. They also receive NIT automaticaly, but pay it back in higher income taxes. Low wage work is threatened by NIT. A labourer receiving a minimum income has less reason to accept work at low wages, not more reason.
David Erskine
124.176.126.98 04:04, 28 October 2007 (UTC)
[edit] Can someone please clean up the terminology?
When the government can and does take my money, that is a 'tax'. When the government can take my money but doesn't for some reason, that's a "tax exemption". When the government gives me back some of the money it took from me, that's a "tax credit". Naturaly, this means the government cannot tax me for more than what I have, it cannot exempt me from more than what it would otherwise take and it cannot credit me for more than what it has taken.
Yet, according to this article, a tax can be applied to a tax exemption, a tax exemption is the same as a tax credit and a tax credit can not only be greater than the amount taxed but greater than what I had in the first place. (Oo) —Preceding unsigned comment added by TheNightFly (talk • contribs)
- I think the term would change to "subsity" once a tax credit returned more then what was taxed. Morphh (talk) 13:25, 17 October 2006 (UTC)
TheNightFly has raised interesting points. NIT emerged as a mathematical idea, that is that negative tax is the same as income. I regard this as no more than a curiosity. See my contribution on Guaranteed Minimum Income.
Someone who has lost their job, or has become too ill to work, needs to pay the groceries now, not when the next tax assessment comes round. The payment of a GMI should be seen as separate from the payment of income tax.
David Erskine
124.176.126.98 04:10, 28 October 2007 (UTC)
[edit] Would be great if someone had sources or even a date for the Nixon references
The article says it came close to passing under Nixon. Which year? Can we get a citation? Was this actually proposed by the Nixon administration, or does "under Nixon" mean he happened to be in the White House, but didn't support the legislation?
[edit] Machine slaves and Negative Income Tax
When the possibility of automated economies emerged in the fifties, those advocating automation painted a picture of a society where people live comfortable lives with only a small amount of work.
All through history, landowners and nobles have had unearned income, and in more recent times this independent class has emerged as lords of creation, moving about the world and living the good life.
Machines take the place of slaves, something that has been known for a century. A slave owning society arranges for a boss class and a slave class. In the future, the boss class will be all people in a society, and machines will be the slaves.
Take Mississippi, about 1850. Whites did little heavy lifting, leaving that to the slaves, as policy. The more slaves there are, the more work is offloaded on to them, as policy, until the boss class does not work much, but still receives income.
Take any advanced society, about 2015. As machines emerge as slaves, it is appropriate for the boss class, that is people, to offload as much work as possible on to the machine slaves, as policy, until a point is reached where the boss class does not work much, but still receives income.
Enter Negative Income Tax, or more realistically, a Universal Pension.
See also marshallbrain.com
David Erskine
124.176.126.98 07:03, 26 October 2007 (UTC)
[edit] Guaranteed Minimum Income, GMI
The goals of NIT are that all should receive a basic income. This idea has been overtaken by the concept of a Guaranteed Minimum Income, or Basic Income. Search Wikipedia and the web on these words, as well as the phrase ‘Freedom not full employment’. There is an excellent German site with a dauntingly long German compound word, which means Freedom not Full Employment. There is even an International Journal on Basic Income Studies.
The German site states explicitly that GMI is only logical, seeing that machines are taking over so much work. Good to see that what scientists have been talking about for fifty years is finally appearing at a political and economic level.
David Erskine
124.176.126.98 03:58, 28 October 2007 (UTC)
- NIT may have different goals, but it is indeed one of two main ways to implement a basic income (which is not the same as a GMI, which may be conditional and means-tested). Guido den Broeder (talk) 08:45, 29 April 2008 (UTC)
