NationStates Jolt Archive

I know the very idea will just annoy some of you to no end, but let's discuss it anyway. Politicians in Canada, and elsewhere have banged around the idea of a Guaranteed Annual Income, and I think it's worth looking at. Before we get into it though, I want to ask that we not discuss it as though the option to get rid of ALL social services was available. Meaning, let's compare it to existing social structures, not the possible future of NO government funded social structures.

So, the Guaranteed Annual Income (http://www.canadiansocialresearch.net/ssrgai.htm) (GIA), some say, would replace Employment Insurance, Old Age Pensions, and assorted other income services. It would ensure that every Canadian had enough money per year, to pay for essentials. It would be a living income, but not a great income...just enough to keep people this side of poverty.

"GAI delivered as a UD would entitle every individual and family to a benefit regardless of income. The benefit could vary by age, family size, family type or other demographic criteria. It would be non-taxable. The net additional cost of introducing a GAI (beyond the offset provided by the cost of the programs it would replace) would be recovered through the personal income tax system."

If the social system is the only option, would the GAI be a better method of dealing with poverty than current systems? Feel free to discuss other aspect of the GAI.

I like it! It would, allow businesses who hire unskilled workers to continue to pay them the current wages (let's face it, McDonalds would go broke if it paid everyone $18/hour) while keeping the working poor fed, clothed, and housed.

Recieving the money should be possible only if you're working, in school or job training, or legitimately unable to work. Wouldn't want people sponging off of the system now, would we?

One way it might work: (taken from original link)

The Negative Income Tax (NIT)

An NIT consists of three elements: the guarantee, the reduction rate and the break even income level.

NIT Elements for a Family of Four

Guarantee: $15,000

Reduction Rate: 27 percent

Break even income level: $55,555

The guarantee is the maximum benefit level for each family. It varies by family size and configuration. In this example, the benefit level for a family of four with no source of income other than the NIT, is equal to the guarantee of $15,000. (This is for illustrative purposes only. A description of the reasoning behind the parameters is provided in sections 2 and 3 where the options are developed more fully.)

The reduction rate comes into play when a family has sources of income other than the NIT. The reduction rate of 27 percent means that for each dollar of income other than the NIT, the NIT benefit is reduced by 27 cents. For example, if a family of four earns income of $5,000, its benefit level is reduced by 0.27 times $5,000 or $1,350. Its total benefit would therefore be $13,650 (i.e., $15,000 minus $1,350). As a result of the additional work income of $5,000, the family's total income increases by $3,650 (i.e., from $15,000 to $18,650). The $18,650 is made up of $13,650 of NIT and $5,000 of earnings.

The break even income level is the maximum income level at which NIT benefits can be received. It too varies by family size and configuration. In other words, for families with non-NIT sources of income greater than the break even income level, the NIT benefit is zero. In this illustration the break even income level is $55,555. (In NIT designs where the reduction is applied to all income from sources other than the guarantee, the break even will always equal the guarantee divided by the reduction rate (i.e., $55,555 = $15,000 divided by 0.27). If a threshold level of other income is exempted from the reduction rate, this formula will not apply.)

Couple of questions: to what would the income be tied in order to keep it from becoming useless in a decade? Prevailing wages? Inflation?

About the biggest thing it has going for it in terms of politics is that it isn't means-tested--that's why killing off Social Security proved to be impossible. Rich folks get SS too, and even if they don't need it, they want it. Conversely, killing off welfare and Medicaid is easy by comparison because it only hurts poor people.

As to the rest, I can't really say--the description seems pretty vague. Would it be tied to the National Health Care System?

Sinuhue, you make my brain happy.

I've sorely missed your words during the Jolt Switch Fiasco. GLad to read them again.

Recieving the money should be possible only if you're working, in school or job training, or legitimately unable to work. Wouldn't want people sponging off of the system now, would we? There are a lot of ideas as to how to encourage people to work, but this in my mind, is the hardest thing to implement...it makes no sense to make it easier to NOT work than to work...as in, the GAI should not be higher, or even completely equal to the income you could earn working a full-time minimum wage job...and yet minimum wage rarely provides enough money to cover the cost of living. I'm not sure what a solution would be.

Just one question, I'm sure it's on a lot of peoples minds. Who's gonna pay for it, and how much will it cost?

Couple of questions: to what would the income be tied in order to keep it from becoming useless in a decade? Prevailing wages? Inflation?

About the biggest thing it has going for it in terms of politics is that it isn't means-tested--that's why killing off Social Security proved to be impossible. Rich folks get SS too, and even if they don't need it, they want it. Conversely, killing off welfare and Medicaid is easy by comparison because it only hurts poor people.

As to the rest, I can't really say--the description seems pretty vague. Would it be tied to the National Health Care System?
To be honest, I've just been introduced to the concept...the paper I linked to is very detailed however, and I'm in the midst of reading it, so I can't really answer your (very good) questions yet!

Sinuhue, you make my brain happy.

I've sorely missed your words during the Jolt Switch Fiasco. GLad to read them again.
Sinuhue....making brains happy since July, 2004!

There are a lot of ideas as to how to encourage people to work, but this in my mind, is the hardest thing to implement...it makes no sense to make it easier to NOT work than to work...as in, the GAI should not be higher, or even completely equal to the income you could earn working a full-time minimum wage job...and yet minimum wage rarely provides enough money to cover the cost of living. I'm not sure what a solution would be.
Couldn't the GAI just ensure that people working minimum wage still have an anual income that ammounts to a living wage? I thought that was the point to the program.

Just one question, I'm sure it's on a lot of peoples minds. Who's gonna pay for it, and how much will it cost?
Well, it depends on the way it is implemented. First, it will be a federal program with some provincial/territorial input. Second, part of the cost will be offset by the fact that a GAI would replace certain social assistance programs such as employment insurance, the Canada Pension Plan, possibly AISH and other social assistance for those who are unable to work (at all, or full time). It would supposedly streamline the social assistance system (though I'm sure they'd find a way to become as bureaucratically bloated as ever). Monies normally paid into those mandatory programs (EI, CPP) would be diverted to this. Tax rates might be increased to offset the cost, or spending reductions may help (the cessation of programs meant to offset poverty, Child Tax Benefits, etc). Transfer payments to poorer provinces would have to be reexamined, and possibly stopped if the GAI were able to offset the disparity.

In short...no one is really sure yet:) We won't see this happen in our lifetime, but it may be a good thing to work toward.

Recieving the money should be possible only if you're working, in school or job training, or legitimately unable to work. Wouldn't want people sponging off of the system now, would we?

no. it goes to everybody regardless of their situation (well, there would probably be a minimum age, like 16 or 18). less paperwork, less bureaucracy, less shame. and it gets rid of most remaining elements of coercion from the wage system - without the threat of starvation or becoming homeless, it's harder to get massively exploited by rich bastards. will there be some people who live just off of the gai? probably. but most people like things and will have to work to get them. even surfers need to be able to afford a board. and everybody gets bored of sitting around eventually.

Couldn't the GAI just ensure that people working minimum wage still have an anual income that ammounts to a living wage? I thought that was the point to the program.
Under the Negative Income Tax (http://www.canadiansocialresearch.net/ssrgai.htm#NIT) method of implementation, I believe so. There is a 'break even level' that you'd have to hit before benefits were $0...in the illustration, that is $55,000 for a family of four. So, your benefits would be reduced for every dollar you earned through work, but you should still be able to have a higher income if you work than if you don't. There are other models though.

This is the other model mentioned in the paper:

The Universal Demogrant (UD)

Under a UD approach, all adult citizens would receive a tax-free cheque from the government adequate for their needs and those of their family. Income from all other sources would be taxed (rates would have to be set at levels sufficient to pay for the UD). Total disposable income would equal the UD plus after-tax income from other sources. Taxes on other income could either be levied at a flat rate or scaled to rise as incomes increase as under Canada's current progressive tax system.

For example, a UD could provide a non-taxable benefit of $20,000 to a family of four and would tax income from other sources at a flat tax rate of 50 percent. (The UD option in Section 3 has a progressive tax structure with three rates. This single rate structure is chosen here to simplify the illustration.) Under such a proposal, a family with earnings of $30,000 would receive a disposable income equal to the guarantee plus half their income from other sources or $35,000 (i.e., $20,000 plus $15,000).

In contrast to the NIT approach, which would provide net benefits only to households up to the break even income level, the UD provides benefits to households all the way up the income scale. The UD has no reduction rate or break even income level. One consequence is that UD expenditures are much higher than NIT expenditures. Another consequence is that the level of taxation must be increased to pay for the higher level of expenditure.

In the view of some economists, a GAI set at poverty thresholds and with a 100 percent tax rate on other income up to those thresholds would be the cheapest way to eliminate poverty. (e.g., J.E. Meade, The Structure and Reform of direct Taxation (London: Institute of Fiscal Studies, George Allen and Urwin, 1978).) However, it would remove any financial incentive to take a job paying less than the poverty thresholds. Moreover, the higher the tax rate on other income, the less the incentive to take a job paying above but close to the threshold levels. After-tax incomes would not be significantly higher, compared to the guarantee, until earnings were considerably above the threshold levels.

it makes no sense to make it easier to NOT work than to work...as in, the GAI should not be higher, or even completely equal to the income you could earn working a full-time minimum wage job...

the gai would have to be about equal to a full-time minimum wage job, if not higher. but any job you did would make you money in addition to the gai. if you want video games and multiple cars and a big house, you are still going to have to find some sort of a job.

and, of course, jobs will have to become more appealing to people who can always easily say "fuck it". who is going to work crap jobs for crap pay? nobody, so pay will go up and conditions will improve. and most jobs will probably move to shorter hours, more employee-centered flexibility, and generally creating workplaces where employees feel empowered and happy.

the gai would have to be about equal to a full-time minimum wage job, if not higher. but any job you did would make you money in addition to the gai. if you want video games and multiple cars and a big house, you are still going to have to find some sort of a job.


Kind of like an extension of these existing programs (yanked from same source):

The Government of Canada, the federal government in the United States and the Quebec government have taken a more direct approach to making work pay by directly supplementing the earnings of the low income working population.

In Canada, a Work Income Supplement of up to $500 is added to the Child Tax Benefit for families earning between $3,750 and $25,921 annually. This supplement is designed as a modest step toward making work pay. About 700,000 families qualify for the supplement.

In the United States, such supplements are paid through the mechanism of an Earned Income Tax Credit delivered through the personal income tax system. It is the goal of the U.S. government to enrich the credits to the point where, added to year-round full-time work paying the federal minimum wage, they would exceed the official American poverty lines for families of four or fewer persons. The credit is available to single adults and childless couples as well as to parents with dependent children and represents varying percentages of family earned income (up to a maximum) depending on the presence and number of children up to two. It is taxed back based on family income.

Generally the goal of a GAI would be to help eliminate poverty, and lessen the stigma of needing and applying for social assistance, as it would be available to everyone equally. It would streamline the system, replacing many different programs with one, and would hopefully cost less to maintain because of that. Also, the incentives could be worked out better than the currently are in the various programs that exist, most of all not penalising people based on how much they work. The problem is just in figuring out how it could be implemented...

~SNIP~

In short...no one is really sure yet:) We won't see this happen in our lifetime, but it may be a good thing to work toward.
Hey, as long as it doesn't completely rape peoples pocketbooks, it sounds like a good plan. Of course, the good plans are always the ones the politicians fuck up. :(

Hey, as long as it doesn't completely rape peoples pocketbooks, it sounds like a good plan. Of course, the good plans are always the ones the politicians fuck up. :(
It IS their specialty after all...

It IS their specialty after all...

specialty? shit, i think they make politicians take some sort of a degree program in 'fucking up easy and good plans'

specialty? shit, i think they make politicians take some sort of a degree program in 'fucking up easy and good plans'
Sad thing is, they all seem to pass with honours:(

Of course, the design and implementation of a GAI would be far from simple.

Sad thing is, they all seem to pass with honours:(

Of course, the design and implementation of a GAI would be far from simple.

though much less complicated than the current structure - but those things have been complexified over decades

though much less complicated than the current structure - but those things have been complexified over decades
To a ridiculous point, yes. But streamlining is hard to do, especially when you have people in government positions who are guaranteed employment...the restructuring alone would cause huge labour issues.

BUT WE SHOULD DO IT ANYWAY!

I know the very idea will just annoy some of you to no end, but let's discuss it anyway. Politicians in Canada, and elsewhere have banged around the idea of a Guaranteed Annual Income, and I think it's worth looking at. Before we get into it though, I want to ask that we not discuss it as though the option to get rid of ALL social services was available. Meaning, let's compare it to existing social structures, not the possible future of NO government funded social structures.

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If you think your immigration is out of control now just promise the world that the starving billions could come and live comfortably on your doorstep. In a perfect world every person would have a work ethic. Fact is that most people are lazy, enough so that even rational thought is more effort than they wish to expend.
What you are discussing might work in a nation with Trillions in income from petroleum sales eg.Saudi Arabia or UAE. Why would an average student in elementary or high school be encouraged to excel? They would always see the GIA as their due irregardless of effort expended.
GIA = total national collapse in less than 25 yrs.

If you think your immigration is out of control now just promise the world that the starving billions could come and live comfortably on your doorstep. I'm Canadian. Our immigration levels are too low, in my mind.

In a perfect world every person would have a work ethic. Fact is that most people are lazy, enough so that even rational thought is more effort than they wish to expend. No, facts do not support your hypothesis that most people are lazy. That is simply your opinion.
What you are discussing might work in a nation with Trillions in income from petroleum sales eg.Saudi Arabia or UAE. Perhaps you should read the funding suggestions? The costs would be offset by replacing existing services, and adjusting current taxation methods. The reason it is seriously being considered is because it will likely be LESS expensive than current social assistance models. This is not a flash in the pan, utopian idea. I suggest you read the paper.

Why would an average student in elementary or high school be encouraged to excel? They would always see the GIA as their due irregardless of effort expended.
GIA = total national collapse in less than 25 yrs.
Absolutely nothing supports your ridiculous prediction. Is it too much to ask that you actually inform yourself on the topic before posting?

I can't believe there isn't more interest in this...hmm...okay, I remove the caveat that you can't discuss the abolition of all social systems....

Hmmmmm... this is quite a beautiful idea, and it gets rid of the stigma of the benefit system, but I wonder if it could only work while the economy is strong?

I'm just thinking back to England about 10 years ago in the aftermath of the crash, when you couldn't find a job no-matter how educated or experienced you were, unless you were able to survive on about £2 an hour (and that was with 2 years plus experience !!)

The problem then was that if a single flat cost about £100 a week, bills, council tax, etc on top, and then you had to add food, petrol, clothes.. and everything else needed to make life ... well, life (I guess?).

So, for every £1 you earnt, you lost £1 in benefit. You needed to work more hours that humanly pos' per wek just to clear the bills........ or the state covered you while people waited for the wage situation to improve.

Which sounds like the more attractive option to most?

Also, getting back to the point a bit.... England was pretty much bankrupt just paying for benefits, because there wasn't the economy 'at that point' to sustain a social benefit system.

It would be wonderful if this minimum income system worked.. but worrying if it pulled a country over the edge when the world economy next crashed.

Absolutely nothing supports your ridiculous prediction. Is it too much to ask that you actually inform yourself on the topic before posting?


HELLO, HELLO
Stop drinking the Leftist cool-aid. All that white stuff between your ears is for something else besides listening to propaganda and punk-rock. The world is rapidly becoming a global economy. What do most of the electronics you buy today say on them? MADE IN CHINA. What kind of car do you buy, mine happens to be a JEEP, but most are imported from Asia. So what is going to support the economy needed to fund your wonderful idea. The competition from overseas labor force is growing more and more intense, driving wages lower and lower.
If you allow your heart to rule when it comes to public assistance programs your desire to help the less fortunate clouds your thought process. Look at the US for a prime example of that. There is an illegal immigrant flood from their southern border due to the promise of something more than the 5 bucks per day that they are glued to in Mexico. Am I sympathetic to their situation? Certainly. I do think that it is wrong of them to flood the US instead of fixing the corrupt system under which they live in Mexico.
If your dream were to become reality, the US would become the superhighway from Central and South America to Canada. The US might help fund you slightly seeing as they would see it as a way to moove their illegal population from US to Canada thus relieving California's current state of bankruptcy.