Ontario looking at basic income guarantee

[dialamah]

.As for people paying their 'fair share' - that is simply rhetorical code for 'tax other people but not me' which is not a morally supportable position. If you believe the government should spend more on transfers you should to demonstrate your commitment by asking that your own taxes be increased.

Thought Topaz was referring specifically to the people who can afford to avoid paying their share of taxes, not just "everybody but me".

Personally I would not have a problem with paying more taxes if it meant free post secondary education and a livable GAI, with a related decrease in substance abuse, crime and poverty-related health issues.

[TimG]

Thought Topaz was referring specifically to the people who can afford to avoid paying their share of taxes, not just "everybody but me".

What does the phrase "their share of taxes" mean? It is completely subjective phrasing that can be applied to anyone that one decides needs to pay more. If there are specific problems that need addressing then she can spell them out. Without such details the only reasonable interpretation is 'I want social programs but other people should pay for them'.

[TimG]

What about the savings related to a reduction in social problems ... Specifically, crime and health?

Those savings are hypothetical and may or may not appear. Any program has to be costed based on the assumption that those savings do not materialize. Even if those savings materialize they are not likely to add to more than a few billion a year which is not going to change the math significantly. Edited March 14, 2016 by TimG

[dialamah]

What does the phrase "their share of taxes" mean? [snip] Without such details the only reasonable interpretation is 'I want social programs but other people should pay for them'.

She said "All those cheaters who don't pay their fair share". How much more specific do you need? Or is this a case of selective reading?

[eyeball]

You have a moral right to give that loonie away, since it's yours. What you don't have the moral right to do is point a gun at my head, demand I give you my dollar, and then go over and give it to someone you believe needs it more. And that's exactly what income redistribution schemes are. They literally steal money from those who earn it - by force - and then give it to those who don't.

Until such time as we find a way to redistribute power money will have to do. If wealthy people stop standing in the way of that maybe we'd be inclined to leave their money alone.

[TimG]

She said "All those cheaters who don't pay their fair share". How much more specific do you need? Or is this a case of selective reading?

Who is she calling a 'cheater'? People who engage in cash transactions to avoid the GST? Natives to abuse their status to sell cigarettes for consumption off the reserve with paying excise taxes? There are lots of "cheaters" but I suspect she has a very specific target in mind based on her prejudices but I am not convinced her target involves that much lost revenue. Edited March 14, 2016 by TimG

[Big Guy]

It makes a lot of sense to me. I have been looking at the concept of GMI for years. The model which I have seen is quite complicated but I will give highlights.:

It has to be applied on a national basis. Establishing this "minimum income" becomes more difficult with size of the nation where economic conditions will vary greatly in different geographic areas.

It is a restructuring of government subsidies and an enormous decrease in government and bureaucratic distribution organizations saving billions of dollars.

The new incomes change very little since tax rates are changed. For example - let us assume that the GMI is $20,000. The individual who to-day has a taxable income of $70,000 pays so much. Under the GMI, the individual now has a taxable income of $90,000 but the change in tax rates would cause his to pay $20,000 more in taxes. The net cost to the government for this would be 0.

Let us assume that the GMI is $20,000. The person who has no income now gets $20,000. He is free to try to find another job or part time job to increase this income (but get taxed accordingly). But from the governments view, we are not proving this individual with any other subsidy - no more welfare, subsidized day care, subsidized dental care, pension, additional living allowances et al or any other "subsidies" which often total over $20,000. Currently, there are about 75 different subsidies available to those who have no income. There would no longer be any need for those 75 government departments and/or their staffs or operating costs.

Any additional government revenues required could be reaped through consumer taxes.

There are enormous challenges in facilitation. Only citizens are eligible? There are great regional difference in Canada as to the cost of living. How would (or would) that be involved in establishing the basic GMI? At what age does a Canadian begin to receive their GMI? Are incarcerated Canadians also eligible and now required to pay for their incarceration?

There are many more challenges.

I would suggest that anyone interested pursue researching the concept. There are various models proposed.

The major challenge as I see it is the philosophical and psychological bent of the researcher. There are those who believe that if a person does not have to "work" for a living then they will not do so and the GMI will create a society of unemployed laggards. Others claim it will result in saving of $billions in bureaucratic redistribution departments that we now have and encourage those in lower income brackets to find work - which in turn will boost our economy.

Most people see GMI as yet another social welfare scheme to give hard earned money to those who earn nothing. It is not. It replaces all of the ones that we now have at a far lower cost.

GMI is the ultimate entitlement program for a nation.

[TimG]

Let us assume that the GMI is $20,000.

25 million taxpayers multiplied by 20K = $500 billion. 13 million taxpayers have <30K income and if you assume that they keep all of the 20K while every one else has their 20K taxed back (a simplification but illustrative) it would still cost $260 billion.

Total government spending (all levels) $345 billion.

There is no way to fund the GAI by redirecting existing spending.

There would no longer be any need for those 75 government departments and/or their staffs or operating costs.

Except the government does not actually spend that much on labour. The majority of money is spent on direct transfers to individuals or for services like healthcare that would not be affected by a GAI.

Any additional government revenues required could be reaped through consumer taxes.

Double the GST to 14% and you would not come close to meeting the new spending requirements.

GMI is the ultimate entitlement program for a nation.

The math does not work under any reasonable scenario. It is an academic's fantasy. Edited March 14, 2016 by TimG

[Bonam]

We went through the math regarding GAI in another thread... the one about what policies the new conservative party should support or something. I initially really liked the idea but the math quickly showed that the overall expenditure would be too high to make it plausible in Canada. That said, I don't expect many people on this forum or elsewhere to care, multiplying numbers and comparing them to other numbers is more work than just saying "I want a guaranteed income".

[Smallc]

We went through the math regarding GAI in another thread... the one about what policies the new conservative party should support or something. I initially really liked the idea but the math quickly showed that the overall expenditure would be too high to make it plausible in Canada.

The only way to make it work would be through a very low clawback threshold, and that really defeats the purpose, I would think.

[Topaz]

TimG.... do u believe that ALL Canadian tax payers should pay what they owe to the government? Most Canadians would say yes, but under the Harper gov't, they made a deal...pay what u owe and we won't fined u for hiding your income. The reason behind it was well these are very rich people and they could tied up the courts and cost the government more money! The solution is to tell them if u are caught, u pay a fine and go to jail for a short period of time. Rich people don't do well in jail.

[Smallc]

under the Harper gov't, they made a deal...pay what u owe and we won't fined u for hiding your income.

That's been going on for a long time, not just under Harper. They'd rather recover lost money than waste time in court.

[cybercoma]

Those savings are hypothetical and may or may not appear.

Those savings have been demonstrated in trials. They're no more hypothetical than vaccines hypothetically giving you immunity.

[TimG]

Those savings have been demonstrated in trials. They're no more hypothetical than vaccines hypothetically giving you immunity.

Sorry, controlled medical studies have no relationship to hypothetical exercises that depend entirely on initial assumptions (for example, what are the chances of a government worker actually getting laid off?).

In any case, the magnitude of the possible savings is tiny compared to the cost so even if they are real they don't make the math work.

Edited March 14, 2016 by TimG

[TimG]

they made a deal...pay what u owe and we won't fined u for hiding your income.

Such amnesties are common and cost effective for the government. Almost no one goes to jail for tax evasion (in this country you could kill someone and be out in a few years). In any case, it is impossible to know how much could be collected when so many countries allow the wealthy to hide money. Numbers like 80 billion a year are tossed around but it is likely impossible to collect. Edited March 14, 2016 by TimG

[cybercoma]

Sorry, controlled medical studies have no relationship to hypothetical exercises that depend entirely on initial assumptions (for example, what are the chances of a government worker actually getting laid off?).In any case, the magnitude of the possible savings is tiny compared to the cost so even if they are real they don't make the math work.

Then no cost benefit analysis is valid and your argument is just as meaningless as anyone else's on the topic.

[TimG]

Then no cost benefit analysis is valid and your argument is just as meaningless as anyone else's on the topic.

Most government sponsored programs under estimate the costs and over estimate savings because advocates choose overly optimistic assumptions in order to build political support. Why would these studies be any different? Edited March 14, 2016 by TimG

[eyeball]

The only way to make it work would be through a very low clawback threshold, and that really defeats the purpose, I would think.

The solution is to increase the threshold along with taxes on wealthy individuals and corporations.

All the money that doesn't get clawed back is going to go straight into the economy so the powerful will get another crack at concentrating it into the hands off the wealthy again.

It's really just an issue of cash flow. There is no shortage of money just the willingness to move it through the system. It's not trickling fast enough so we need to pump it.

If objections to a GMI contained the elements of sustainability that are typically absent in virtually any discussion on where much of our wealth actually comes from, i.e. the natural capital of the real world -they could perhaps be taken more seriously.

The ideological objections are not realistic and simply to weighed with olde school quasi-religious morality. I also fail to see how anything but a guaranteed income will ever address the fundamental clash of values that exist between the moral imperative to produce and labor eliminating technologies.

In another thread on this Tim mentioned something about people creating wealth in some virtual world and then transferring it into the real world but...I really think taxing the rich sounds a little more realistic.

Edited March 14, 2016 by eyeball

[bush_cheney2004]

Isn't GMI just a self-fulfilling policy and ideology that would hasten the very collapse it is intended to stem ? Why would Canada's most productive people continue to risk capital and labour for a permanent and growing "underclass" ?

Wasn't this idea tried in one province and quickly abandoned ?

[eyeball]

Why would Canada's most productive people continue to risk capital and labour for a permanent and growing "underclass" ?

Why would Canadians, often needy one's, volunteer billions of dollars worth of free labour to a society and economy that's so demanding of everyone's productivity?

Volunteers prove the idea that free stuff only encourages a sense of entitlement. The demand for volunteers has never been greater - neither has the demand nor the expectation of cheaper labour.

Edited March 15, 2016 by eyeball

[Big Guy]

25 million taxpayers multiplied by 20K = $500 billion. 13 million taxpayers have <30K income and if you assume that they keep all of the 20K while every one else has their 20K taxed back (a simplification but illustrative) it would still cost $260 billion.

Total government spending (all levels) $345 billion.

There is no way to fund the GAI by redirecting existing spending.

Except the government does not actually spend that much on labour. The majority of money is spent on direct transfers to individuals or for services like healthcare that would not be affected by a GAI.

Double the GST to 14% and you would not come close to meeting the new spending requirements.

The math does not work under any reasonable scenario. It is an academic's fantasy.

Parsing posts is a very effective method of replying to a point of view and a method used by many on this board. I am not comfortable replying to posts using that format. The process would require me to parse the parsed post and my experience has been that it leads to very long posts in which parsed posts are parsed and those parsed posts are again parsed leading to confusion. For that reason I do not reply to posts which posters have chosen to parse. I would assume that I have the right to reply or not to reply to a post referring to something that I have posted.

I have just been given a warning stating that that "Please ignore posts rather than posting comments like this: "Sorry, I do not reply to parsed posts". Since I am unable to state the reason at any time when I want to explain to a fellow poster why I am not answering a question then please assume that in the future, If I do not respond to your comment, that I am not ignoring you but unable to give the reason for my lack of response.

[Martin Chriton]

25 million taxpayers multiplied by 20K = $500 billion. 13 million taxpayers have <30K income and if you assume that they keep all of the 20K while every one else has their 20K taxed back (a simplification but illustrative) it would still cost $260 billion.

Total government spending (all levels) $345 billion.

There is no way to fund the GAI by redirecting existing spending.

Thanks for this post. I liked the idea of a GAI; but clearly it's not viable

The solution is to increase the threshold along with taxes on wealthy individuals and corporations.

The challenge is most folks define wealthy as those that earn more than they do. If you restrict to only those top few there isn't too many tax. The top marginal rates are already above 50%.

[eyeball]

Lets start with the 160 families or whatever it is that control/hold half the wealth of Canada.

I'm quite certain the way Canada is run it'll be all concentrated back into their hands in a few years anyway.

[Martin Chriton]

What's the math on taxing those 160 families? At what tax rate and how much new revenue does it bring in?

[Big Guy]

What many calculations of the "cost" of GAI omit are the savings on no need for different programs: Welfare, pensions, disability payments all subsidies based on income plus the costs of administering all of these programs. They would no longer be required and these departments would disappear - costs for space, supplies, equipment and salaries.

I do not dismiss this concept based on costs. I have more concerns about facilitation and establishing a general GAI which has the same impact and effect in rural Nova Scotia as in downtown Vancouver - i.e. very different regional economies in Canada.