# Negative Income Tax -- good idea? **URL:** \ **Category:** Great Debates\ **Created:** [June 16, 2011, 7:12pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733 "2011-06-16T19:12:29Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [June 19, 2011, 3:43am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/81 "2011-06-19T03:43:45Z")
> [@Zeriel](#): > > My understanding is that you “merely” have to satisfy your case officer that you are actively seeking a job, and take the advice s/he gives you regarding things like “go down to the job center and put in five applications this week”. > > My understanding may be out of date. The beauty of the negative income tax system is that bureaucracy of enforcement just goes away–we don’t care if people are lazy, because no one who is capable of making more money is going to be satisfied with living at the poverty line for any length of time IMHO. I’m as lazy as they come, but if this system were in place I wouldn’t quit my day job, even if I were still making 15k or 20k. I think there is a 60 month lifetime cap on welfare benefits. ---
**Author:** ![Blalron](https://avatars.discourse-cdn.com/v4/letter/b/35a633/32.png) [@Blalron](https://boards.straightdope.com/u/Blalron)\ **Post date:** [June 19, 2011, 3:55am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/82 "2011-06-19T03:55:41Z")
> [@curlcoat](#): > > Producing too much what stuff? Exhibit A: Carbon Dioxide emissions, leading to [global warming](http://en.wikipedia.org/wiki/Global_warming), and devasting effects from global climate change. Exhibit B: [The Great Pacific Garbage patch](http://en.wikipedia.org/wiki/Pacific_Garbage_Patch). A large section of the ocean filled with plastic debris from our Consumer Culture. ---
**Author:** ![StarvingButStrong](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/starvingbutstrong/32/335_2.png) [@StarvingButStrong](https://boards.straightdope.com/u/StarvingButStrong)\ **Post date:** [June 19, 2011, 11:29pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/83 "2011-06-19T23:29:13Z")
As I read this thread I’m having strong flashbacks to the book “Drowning Towers” by George Turner. =========== From a book review published on Amazon: # Under its original title, The Sea and Summer, this book recently received the Arthur C. Clarke Award as the best SF novel published in England in 1987. Australian writer Turner envisions a 21st century nightmare that is the result not of war but of economic and climatic forces already underway. Massive unemployment has combined with the greenhouse effect (raising global temperatures and the sea level) to produce a society in which nine-tenths of the population lives in high-rise ghettos, jobless and demoralized. And, of course, the way that society chose to get out of the dilemma of 90% of your population being basically “useless” was an engineered disease, a minor flu-like illness IIRC, with the minor side-effect of inducing sterility… ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [June 20, 2011, 1:17am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/84 "2011-06-20T01:17:17Z")
> [@curlcoat](#): > > Well, essentially that is what we do now - if you don’t have any children, there isn’t anything out there after unemployment runs out. This is one reason why people have children when they are dirt poor - it’s the only way to support themselves. Well, legally anyway. That’s a perverse incentive if I ever heard one! When you perceive your choices are “starve”/“have no income” or “have a kid”, most people are going to have the kid. > [@curlcoat](#): > > Neither would I but I used to live among folks who lived on far less than that and were satisfied with it. That’s ultimately a risk of any system where you take “we don’t let people starve” as a given. (which I do, when it comes right down to it). > [@](#): > > Sounds like high unemployment rates are going to be the thing of the future then. More than a few of the people who propose systems like this are doing so as a response to the idea that technology is causing productivity to rise but potentially causing job availability to shrink. One could easily theorize a point in the foreseeable future where all non-creative, non-innovating jobs (any job, basically, that can be broken down to a set of responses to specific events–including 90% of my high-flying IT Director job, ultimately, I’m under no illusions about whether a sufficiently complete and fast expert system could put together a better network infrastructure than me) are done by computers/robotics. At that point, would this sort of policy become a no-brainer? What level of unemployment (presuming a consistently expanding GDP) would make this kind of idea more palatable? > [@](#): > > The folks I mentioned above didn’t seem to care. Many of the men were hopeless alcoholics, which of course doesn’t help, and I guess the women didn’t think much of themselves because they not only stayed with these men, they bred with them. Their kids were damn near feral. Perhaps we could take some of the money this plan saves from removing all the social workers associated with overseeing the disbursement of our current various social welfare programs, and instead pay some people to make concrete improvements to our foster care and school systems. > [@](#): > > Um, many rich people don’t work, so they’d end up paying no tax. A side effect that I’m ultimately willing to live with, they’d more than make up for what they receive with the capital gains taxes they’re already paying. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [June 20, 2011, 2:59am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/85 "2011-06-20T02:59:44Z")
> [@Bosstone](#): > > I assume it about you because you’ve professed similar ideas before. Nothing to do with children. Shrug, then I don’t know where it came from. However, your assumption is wrong. Not that you are unusual - people do tend to decide that someone is “cold and ruthless” if they don’t hold the same priorities. > [@](#): > > What’s the alternative? Let them starve in the streets? Re-enact _The Lottery_? I don’t know what The Lottery is, and there are many things these folks could be doing to avoid starving in the street. As a matter of fact, I have yet to see anyone do that, tho I suppose it must have happened at some point, some where. I’m just getting tired of supporting people simply because they reproduced - you do know that the government doesn’t hand money to homeless non-parents, right? For some reason, it’s OK for _them_ to starve in the streets… > [@](#): > > I think **Blalron** ’s idea of getting a salary for having a vasectomy is probably the most workable solution in order to gradually reduce population to sustainable levels, but I foresee a lot of resistance to that idea. Perhaps they could start small and hand out short term salaries to women who get that five year birth control shot, I forget what it is called. Since men can’t have children, I think anything like that should be aimed at women anyway. Or start even smaller and start giving tax rebates to those who don’t have children, instead of tax rebates for having them. Quit rewarding people for reproducing. > [@Blalron](#): > > Exhibit A: Carbon Dioxide emissions, leading to [global warming](http://en.wikipedia.org/wiki/Global_warming), and devasting effects from global climate change. > > Exhibit B: [The Great Pacific Garbage patch](http://en.wikipedia.org/wiki/Pacific_Garbage_Patch). A large section of the ocean filled with plastic debris from our Consumer Culture. Oh, well, that’s a whole other debate. I do agree with you but I don’t think that has much to do with the idea of paying people to not work. > [@Zeriel](#): > > That’s a perverse incentive if I ever heard one! When you perceive your choices are “starve”/“have no income” or “have a kid”, most people are going to have the kid. Except that the choices tend to be “have a kid” or “go to work”. It simply cannot be true that _every_ person who has a child just before or while on welfare was in the “starve”/“have no income” dilemma. Like I said above, we don’t pay non-parents to stay alive, yet somehow they do. The only reason we pay parents is because people have a need to help the innocent children, which history shows is short sighted. Somehow, we need to get out of the business of paying people to have kids. > [@](#): > > That’s ultimately a risk of any system where you take “we don’t let people starve” as a given. (which I do, when it comes right down to it). But, we don’t have a system of “we don’t let people starve”, we have a system of “children cannot grow up without what we decide is enough food, shelter and health care”. Which can lead to adults being perfectly satisfied to live off the government. > [@](#): > > More than a few of the people who propose systems like this are doing so as a response to the idea that technology is causing productivity to rise but potentially causing job availability to shrink. One could easily theorize a point in the foreseeable future where all non-creative, non-innovating jobs (any job, basically, that can be broken down to a set of responses to specific events–including 90% of my high-flying IT Director job, ultimately, I’m under no illusions about whether a sufficiently complete and fast expert system could put together a better network infrastructure than me) are done by computers/robotics. At that point, would this sort of policy become a no-brainer? What level of unemployment (presuming a consistently expanding GDP) would make this kind of idea more palatable? So, instead of working towards a smaller, more sustainable population, we are instead going to go forth willy nilly into severe overpopulation and paying people to stay home and create more people? At what point to we realize that it is simply too hard on the current population and resources to continue to allow people to selfishly have as many children as they want? Maybe we’ll get lucky and have space travel to other Class M planets before we ruin this one beyond repair. > [@](#): > > Perhaps we could take some of the money this plan saves from removing all the social workers associated with overseeing the disbursement of our current various social welfare programs, and instead pay some people to make concrete improvements to our foster care and school systems. If the government has anything to do with it, they’ll probably just fund another war… ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 20, 2011, 3:38am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/86 "2011-06-20T03:38:31Z")
> [@Blalron](#): > > What’s odd is that if you actually look at the evidence, there’s an inverse correlation between government welfare programs and child birth. Look at Europe. They have more generous social programs than we do, and yet their birth rate is below the replacement rate. you’re talking about overall birth rate versus birth rate broken down by economic range. Clearly children born into poverty are more likely to continue the cycle based on the influence of their parents. If you fund a cycle of irresponsible breeding you get what you pay for. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [June 20, 2011, 5:20pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/87 "2011-06-20T17:20:19Z")
> [@emacknight](#): > > Next consider that you start taxing a person after $14k, and let’s make the number 10% for simplicity. A guy that works 40 hours per week at $10 per hour earns $20k per year, meaning he has $18k after taxes. He’s working 25 hours more per week to make an additional $7k per year, meaning he’s paid $10 an hour for the first 15, then $5.40 per hour for the next 25? Because, even at $5.40/hr, if he works an 8 hour day, that is $43 and change in his pocket. That’s not an insignificant amount for me, but if you had a yearly salary of $20k, that’s a healthy chunk of change in your wallet! Why would you rather sit at home and do nothing? ---
**Author:** ![Blalron](https://avatars.discourse-cdn.com/v4/letter/b/35a633/32.png) [@Blalron](https://boards.straightdope.com/u/Blalron)\ **Post date:** [June 20, 2011, 5:34pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/88 "2011-06-20T17:34:43Z")
Another beneficial angle to this is that it gives those on the bottom end of the socioeconomic ladder more bargaining power versus their employers. Nobody will be forced to take a job just to avoid starving or going homeless. I believe that if a particular job is so terrible that the only way you can get people to work it is out of pure desperation, than that job shouldn’t exist. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [June 20, 2011, 6:05pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/89 "2011-06-20T18:05:12Z")
The biggest issue here (aside from the expected “don’t use my money on handouts”) seems to be “How do we prevent a lot of people from just sitting on their butts and not working?” My initial thought, from my experience, is “is that actually likely to be a problem? Most people want to have more than bare minimum shelter/food/luxuries”. I haven’t been able to find any decent studies one way or another that compares “number of people on welfare” to “amount/type of welfare given out”. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [June 20, 2011, 6:31pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/90 "2011-06-20T18:31:26Z")
> [@emacknight](#): > > This brings up an interesting question: what happens if a person is independently wealth, and can report income low enough to qualify for negative income tax? > > A person with millions in savings could set it up to earn $8k in interest, then get $6k from the government, and dip into savings when he wants something big. If his mansion and Ferraris are paid for his cost of living is pretty low. Why would you forego $2 in interest to collect $1 in federal subsidy? ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [June 20, 2011, 7:43pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/91 "2011-06-20T19:43:02Z")
> [@Damuri\_Ajashi](#): > > Why would you forego $2 in interest to collect $1 in federal subsidy? Risk. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [June 20, 2011, 8:00pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/92 "2011-06-20T20:00:11Z")
> [@Zeriel](#): > > The biggest issue here (aside from the expected “don’t use my money on handouts”) seems to be “How do we prevent a lot of people from just sitting on their butts and not working?” > > My initial thought, from my experience, is “is that actually likely to be a problem? Most people want to have more than bare minimum shelter/food/luxuries”. I haven’t been able to find any decent studies one way or another that compares “number of people on welfare” to “amount/type of welfare given out”. You’re right, very few people actually want to sit around doing nothing, where as most people are quite content working multiple jobs. The issue here is that the program may actually discourage people from working more. As I tried to say earlier, this program creates a progressive tax of 46% for income earned after $13k. Each hour worked is subsequently less worth while. But note that this point is only valid in that range as the cash payments stop. Yet this is exactly the area you should want to focus on. This group of working poor are exactly the demographic that needs that little extra support. In effect, the negative income tax favours the lazy at the expense of the hard working. And to bring up the point again, right now low income earners can qualify for medicaid, section 8 housing, SNAP, and a handful of other programs. All totaled those can be worth hundreds of dollars per month, but they all have an income cut off. So if for example the income cut off was $20k, a person that wants to earn $43 per week, works an extra 8 hours per week and hopes to earn $22k a year. But doing so costs him all of those benefits, which were worth way more than $2000 per year. He’s worse off for having worked another day per week, and would have been better off staying at home. It’s this simple fact that makes UHC so fundamentally important in society. It’s also why Canada makes rent tax deductible by not mortgage interest. As a result you’ll see two things happen to the program you suggested: one is to make it worse and worse in the hopes of discouraging use, but that negates the purpose of the program in the first place, at some point there has to be a lower limit to what you provide. And two, extra conditions need to be applied as each individual case presents itself; married, single, children, joint custody, injured, disabled, etc. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [June 20, 2011, 8:04pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/93 "2011-06-20T20:04:07Z")
> [@jtgain](#): > > Because, even at $5.40/hr, if he works an 8 hour day, that is $43 and change in his pocket. That’s not an insignificant amount for me, but if you had a yearly salary of $20k, that’s a healthy chunk of change in your wallet! Why would you rather sit at home and do nothing? Although this was already answered several times, I’ll point out again that your normal salary would be $10 per hour. This program creates a progressive tax reducing your tax home to $5.40 per hour. You should be earning $80 that day, instead you only earn $43. Knowing that you could be earning $80, and that an extra day of work includes all of the costs of your previous day’s work, I think you’d be incentivized to work for cash. So even though lots of people are working 40 hours per week, they’re only reporting the first 25. Such is the results of a heavily progressive income tax structure. ---
**Author:** ![gatorslap](https://avatars.discourse-cdn.com/v4/letter/g/bb73d2/32.png) [@gatorslap](https://boards.straightdope.com/u/gatorslap)\ **Post date:** [June 21, 2011, 8:24am UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/94 "2011-06-21T08:24:48Z")
> [@emacknight](#): > > The issue here is that the program may actually discourage people from working more. Why is that bad? Is it socially desirable to have more people work longer hours / multiple jobs? Maybe we _should_ discourage people from working more, to free up the jobs for everyone else. Trade people not working as much for more people working. ---
**Author:** ![randomface](https://avatars.discourse-cdn.com/v4/letter/r/5fc32e/32.png) [@randomface](https://boards.straightdope.com/u/randomface)\ **Post date:** [June 21, 2011, 12:11pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/95 "2011-06-21T12:11:51Z")
Why is it seen as desirable to use the power of the government to try and rework the fabric of society? Would any of you actually vote to give the government this kind of authority? ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [June 21, 2011, 12:29pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/96 "2011-06-21T12:29:28Z")
> [@emacknight](#): > > It’s hard to put this into a more eloquent point, but right now in the US a low income person does very well earning less than about $26k\*. They are earning income, but also qualifying for a lot of assistance programs. Bullshit. Complete and utter bullshit. I wish I could eliminate this pernicious myth. No, in the US a low income person _does not_ do well. Seriously. Unless you have kids the only thing you can qualify for is foodstamps and _maybe_ some type of Medicare program. _You get nothing else_. Even if you have a kid, you can only get assistance for a total of 5 years over a the _lifetime_ of that child. Please, DO tell me about these “lot of assistance programs”. What are they? Where are they? Or are you one of those folks who missed the Welfare Reform of the 1990’s and is somehow thinking that one can live high on the hog without working? ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [June 21, 2011, 12:35pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/97 "2011-06-21T12:35:19Z")
> [@Zeriel](#): > > My understanding is that you “merely” have to satisfy your case officer that you are actively seeking a job, and take the advice s/he gives you regarding things like “go down to the job center and put in five applications this week”. > > My understanding may be out of date. Yes, it is - at least in my state. When I was in the no work situation I had to document that I was looking for work 30 hours a week. Applications filed on-line had to be done at the center’s work stations and/or backed up by printing out the screens you worked through. If you claimed you went on on interview they would call the employer and confirm you were there. It’s was a freakin’ lot more than just 5 apps a week. The worst part? I did it for 5 weeks and didn’t get jack from it. Not one job. Found work through a friend of a friend which I was told “didn’t count” as job hunting. Still, when I started earning money I got out of _that_ particular grind. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [June 21, 2011, 12:40pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/98 "2011-06-21T12:40:28Z")
> [@Clothahump](#): > > Income tax and wealth redistribution by the government is a bad idea no matter how it’s pitched. And letting people freeze to death on the sidewalk due to lack of housing and starve due to lack of means to buy food is somehow preferable? Maybe we just need to decide on the lesser of two evils. ---
**Author:** ![Zeriel](https://avatars.discourse-cdn.com/v4/letter/z/58956e/32.png) [@Zeriel](https://boards.straightdope.com/u/Zeriel)\ **Post date:** [June 21, 2011, 2:14pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/99 "2011-06-21T14:14:53Z")
> [@randomface](#): > > Why is it seen as desirable to use the power of the government to try and rework the fabric of society? Because people who have money are not sleeping on the streets I have to walk on, they are less inclined to steal my car stereo for their daily hit, and they are less likely to starve and die in places where I’m going to have to step over their corpses on my daily commute. Make no mistake–I see charity to the extreme poor as at least partially in my own self-interest as a guy who makes a decent amount of money and doesn’t want to be robbed, begged, or inconvenienced by a stinky sleeping homeless guy. The fact that I don’t think people should die/starve/go homeless in my incredibly wealthy first-world society for lack of a job, especially when the economy is in the state it is in, is also a major part, but that doesn’t seem to resonate with a certain class of people. > [@](#): > > Would any of you actually vote to give the government this kind of authority? In a heartbeat. > [@Broomstick](#): > > Yes, it is - at least in my state. Ignorance fought, thanks! ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [June 21, 2011, 6:40pm UTC](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733/100 "2011-06-21T18:40:29Z")
> [@Zeriel](#): > > The biggest issue here (aside from the expected “don’t use my money on handouts”) seems to be “How do we prevent a lot of people from just sitting on their butts and not working?” > > My initial thought, from my experience, is “is that actually likely to be a problem? Most people want to have more than bare minimum shelter/food/luxuries”. I haven’t been able to find any decent studies one way or another that compares “number of people on welfare” to “amount/type of welfare given out”. I’d say that most people want to have more than the bare minimum but where we get into a gray area is how many are willing to actually work for it. Then when you add in those who would be raised by non-working parents under your plan, you may end up with a growing number of people who are happy to sit on their backsides, drinking beer and watching the telly all their lives. [Previous page](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733.md?page=4) [Next page](https://boards.straightdope.com/t/negative-income-tax-good-idea/585733.md?page=6)