Guarantee everyone a basic income of $20,000

[Possum Trot]

It seems to me that there have been several stories about how the City of Toronto spends more than $20k per homeless person so this could actually be a money saver.

Issues to overcome:
The simpleservants/ bureaucrats will never go for this as it would reduce too many of them from $80k to $20k;
Homeless who are alcoholics or druggies still need help on top of this;
Integration with other programs such as UI etc.;


PS hands up for all those that actually think that mocking is significantly different than insulting. So does that mean train can continue to insult fuji with impunity on some of fuji's more nonsensical stuff as long as he calls it mocking?

 

[fuji]

I mocked HOF by pointing out his short-comings. Specifically, I mocked his ridiculous misunderstanding of post #1.

 

[ogibowt]

I'm all for giving people a hand up but just giving someone $20K with no strings attached isn't my idea of that. I have sympathy for this woman who feels dehumanized, I'm sure the agents can do a better job in treating her as a human being. What I'd like to see is welfare amounts given out on a case by case basis. The receipient sits down with a case worker and prepares a monthly budget and then they design a payout scheme based on that. It should also take into effect the cost of living geographically i.e. why should a welfare recipient in Sudbury get the same benefit as one living in Toronto.

My other concern would be the inflationary effect of this policy, which doesn't seem to be addressed in the article.

a case by case basis? wow..we will have to create a whole new bureacracy....why dont we just treat them like we treat GM..hand over gobs of money, and then not demand it creates new jobs..

 

[K Douglas]

a case by case basis? wow..we will have to create a whole new bureacracy....why dont we just treat them like we treat GM..hand over gobs of money, and then not demand it creates new jobs..

The fact that you're arguing against bureaucracy makes me laugh. And for the record I, like most conservative individuals, am opposed to corporate welfare.

 

[K Douglas]

Would you agree that if government spending remains the same, or actually declines, then the policy is not inflationary?

The government would be able to fire so many government workers, cutting the size of government so dramatically, and saving all of those salaries, that you might realistically see a decline in government spending as a result of this: EI, CPP, welfare, OAS, perhaps even OSAP, and many others. These are not small agencies, and they would all vanish, saving loads, and loads, and loads of taxpayer dollars.

Those case by case assessments you demand are expensive and time consuming, represent inefficient central planning of people's lives, and offer dubious benefit to the economy, with respect to the large amount of money spent on the government administrations that prepare them.

I can almost guarantee that getting rid of the costs of income security (CPP,OAS,EI,welfare etc) and replacing them with a new encompassing agency would not come close to saving the amounts of money that would be transferred to individuals. For one CPP and EI collect premiums every year, I would assume that under your plan that revenue stream would be eliminated. Or would you just convert that rate to a piggy back on the general income tax rate?

Yes the case by case assessments may not be feasible, but something has to change. Too many people are abusing the system. Those on the left say it's minimal but most economists would agree that the amount of fraud and waste in welfare is approx 20% of all costs.

 

[ogibowt]

The fact that you're arguing against bureaucracy makes me laugh. And for the record I, like most conservative individuals, am opposed to corporate welfare.

libertarians are opposed to corporate welfare..neocon goverments are the life,s blood of corporate welfare.there is a huge distinction...

 

[fuji]

Or would you just convert that rate to a piggy back on the general income tax rate?

The whole scheme would require an adjustment to the way taxes work as lots of premiums and other things would disappear--and many deductions too would disappear.

The goal would be to make all these adjustments revenue neutral.

Plainly there is some level of minimum payout that can be achieved in a neutral way. Take all the money currently disbursed, add to that all the money currently spent on salaries that would be saved. That's your pool of funds.

You can either start with the poorest person and give them $20k, and work your way up giving more people $20k, until the funds run out, or you can decide on what group of people to give funds to, and divide the pool between them.

So plainly it is possible, by adjusting the number of people paid, and the size of the payment, to do this in an inflation neutral way.

It can also be shown that this disburses more money to more people, quite trivially--you're still disbursing all the money you used to, plus you're also disbursing money that you used to pay as salary, so you are either paying more than before, or paying more people than before.

 

[K Douglas]

The whole scheme would require an adjustment to the way taxes work as lots of premiums and other things would disappear--and many deductions too would disappear.

The goal would be to make all these adjustments revenue neutral.

Plainly there is some level of minimum payout that can be achieved in a neutral way. Take all the money currently disbursed, add to that all the money currently spent on salaries that would be saved. That's your pool of funds.

You can either start with the poorest person and give them $20k, and work your way up giving more people $20k, until the funds run out, or you can decide on what group of people to give funds to, and divide the pool between them.

So plainly it is possible, by adjusting the number of people paid, and the size of the payment, to do this in an inflation neutral way.

It can also be shown that this disburses more money to more people, quite trivially--you're still disbursing all the money you used to, plus you're also disbursing money that you used to pay as salary, so you are either paying more than before, or paying more people than before.

All these arguments are a moot point fuji for this simple reason:
Who will fill all the low wage jobs? If someone is given $20K for doing nothing where is the incentive to work for $10/hr? Many businesses rely on cheap labour to survive - convenience stores, dry cleaners, fast food outlets, discount dept stores etc. Drastically reducing the supply of labour will either put these people out of business or force them to raise prices, causing massive inflation. This proposal has good intentions but it will have disastrous effects on the economy. I'd love to hear some viewpoints from the economic community on this.

 

[fuji]

I think this scheme would be a strong boost to low income jobs. You could, for example, eliminate the minimum wage as a result, so that a business could pay $2/hr, say.

An individual would then receive their $20k minimum payment, and if they worked 2000 hours a year at $2/hr, and paid 25% tax, they would have $23,200 to live on--their $20k minimum plus $4000 in earnings less $1000 in tax. That means every dollar they earn only increases their well being and provides a strong incentive to work.

Also as I mentioned above often proposals like this are combined with a flat tax rate, as the guaranteed minimum $20k income provided to everyone eliminates the need for a progressive tax scheme with brackets. Generally people view flat taxes as providing a stronger incentive to work than bracketed taxes.

You don't get blowback from the left about flat taxes under a proposal like this, because the deal includes one of the holy grails the left has always sought--a guaranteed minimum standard of living for everyone. At the same time, it achieves a right wing holy grail in flat taxes and an income curve that does not discourage work as every dollar you earn benefits you (no claw backs at the low end, no penalty for being rich at the high end).

 

[flubadub]

I think this scheme would be a strong boost to low income jobs. You could, for example, eliminate the minimum wage as a result, so that a business could pay $2/hr, say.

An individual would then receive their $20k minimum payment, and if they worked 2000 hours a year at $2/hr, and paid 25% tax, they would have $23,200 to live on--their $20k minimum plus $4000 in earnings less $1000 in tax. That means every dollar they earn only increases their well being and provides a strong incentive to work.

That's funny.
You seriously expect anyone would work 2000 hours at $2/hr?
Very funny.

 

[fuji]

That's funny.
You seriously expect anyone would work 2000 hours at $2/hr?
Very funny.

The point being that you could eliminate minimum wage, and any deal between any two people that could be agreed would be viable. If that's $2 or $5 or $8 it doesn't matter to the point that I'm making here. Given the guaranteed floor on incomes there's nothing objectionable about low wages--they simply add on to an already adequate minimum standard of living.

 

[flubadub]

The point being that you could eliminate minimum wage, and any deal between any two people that could be agreed would be viable. If that's $2 or $5 or $8 it doesn't matter to the point that I'm making here. Given the guaranteed floor on incomes there's nothing objectionable about low wages--they simply add on to an already adequate minimum standard of living.

Maybe, but if you seriously think someone would put in a 8 hr day for $16, you should get your head checked. That's working for lunch and ttc money.

 

[fuji]

Maybe, but if you seriously think someone would put in a 8 hr day for $16, you should get your head checked. That's working for lunch and ttc money.

Lots of people in the world work 8 hours days for much less than that.

 

[flubadub]

Lots of people in the world work 8 hours days for much less than that.

Oh, I see, you would like to reduce the standard of living in Canada until people would be willing to work for the wages of China or Mexico.
Very socially progressive.

 

[rld]

Lots of people in the world work 8 hours days for much less than that.

But nobody with a $20,000 minimum annual income does.

 

[needinit]

I think this scheme would be a strong boost to low income jobs. You could, for example, eliminate the minimum wage as a result, so that a business could pay $2/hr, say.

An individual would then receive their $20k minimum payment, and if they worked 2000 hours a year at $2/hr, and paid 25% tax, they would have $23,200 to live on--their $20k minimum plus $4000 in earnings less $1000 in tax. That means every dollar they earn only increases their well being and provides a strong incentive to work.
....

I generally agree with your points, I don't think many people would want to work full-time for $3,000 per year...if the minimum wage was reduced, say to 1/2 what it is now, the a person would make (minimum ) around, say $30,000 a year working FT. People can stay at home and care for kids, decide to work FT or PT go to school to upgrade skills (and get a job at a higher hourly rate) and still have a reasonable way of life. (ie $20k) -

Part time employment is good for the economy (if the above is in place) - can care for kids better, have less stress and can therefore be healthier, work until older (so not a cost to society) and enjoy vacation time etc.

There would also be a boost to business - their labor costs just halved and people would have more money so would spend more as well (say eating out or on household goods).

If, combined with streamlining the agencies currently managing or this and simplifying the taxation system, then yes a lot of money put possibly be re-directed to other initiatives such as large infrastructure projects which once again employs people and serves a longer term purpose (new highways, storm water systems etc which require large capital funding for each 'build')

 

[fuji]

Oh, I see, you would like to reduce the standard of living in Canada until people would be willing to work for the wages of China or Mexico.
Very socially progressive.

Yeah, because providing people with $20k/year guaranteed income clearly reduces their standard of living.

You aren't too smart are you?