OC Obvious problem cases

cazabon, 10 months ago

@abff08f4813c

A negative income tax would indeed eliminate the moral hazard - if it replaced all other benefits. I can see that being a win individually, economically, and socially.

Is that the sort of proposal you would support?

#NegativeIncomeTax #UBI #taxes #benefits

abff08f4813c, 10 months ago

Depends on what you mean by "all other benefits" - up in Canada I'm pretty attached to my healthcare, for example.

But certainly, it'd be a good starting point to work from. And I certainly could be convinced that there's no other way to a UBI except for an "all benefits replacing negative income tax", though my first response would be to try and poke and see if there's any leeway (e.g. for benefits for folks who worked in the country for decades but now live overseas in a different country without a BI, for folks who have severe disabilities that a standard, even if generous, NIT or UBI wouldn't be enough to cover, etc).

cazabon, 10 months ago

@abff08f4813c

Yes, I was unclear.

I meant a negative income tax that replaced other income-support programs - (un)employment insurance, welfare, etc. Although I don't really see how CPP could fit into this - many people are dependent on it, but don't work specifically because they retired.

I was not intending to mean scrapping medicare or other non-income-support universal benefits.

abff08f4813c, 10 months ago

So leave medicare/CPP/other non-income-support benefits alone, and this kind of negative income tax program is likely one that I can get behind. Ideally, we'd have an analysis that no one loses money in the switch, but even if a few lost some small amount, I'd likely still get behind it. (If we're talking about enough money reduced to ruin livelihoods that would be a non-starter for me, however.)

The benefit of a true universal basic income over something like a negative income tax is that erroneous clawbacks can't happen like appears to be occurring with CERB, https://www.cbc.ca/news/politics/cra-taxpayers-ombudsperson-complaints-backlog-1.6907204

That said, an NI might simplify things enough that cases like the above are rare and unlikely (whereas CERB is kinda hideously complex). Interested to see if you have any ideas on how to achieve the above as well - avoid payments to the ultrawealthy who don't need it (which a true UBI would give) but at the same time avoid the risk of clawbacks or false ineligibility (running the test and saying that a person isn't eligible because, say, they were just shy of the limit by 7 bucks or something).

cazabon, 10 months ago

@abff08f4813c

I don't think it would be politically feasible. As soon as you touch EI or similar payments, there would be an uproar (even if you were trying to replace it with something better), and politicians in general are spineless and will do everything they can to avoid ever attracting that kind of attention.

The CRA / CERB situation is unfortunate. When CERB was announced, its problems were immediately pointed out. Now they're trying to fix them, rather than preventing them first...

abff08f4813c, 10 months ago

I don't think it would be politically feasible. As soon as you touch EI or similar payments, there would be an uproar (even if you were trying to replace it with something better),

Thinking it over, touching EI (employment insurance) doesn't make sense, anymore than with CPP. IIUC, the employer pays into a separate fund for both types, and when the employee is eligible (laid off or fired without cause for EI or retired for CPP) then the payments start. But it ultimately comes from the labour of the employee, so it makes sense that these shouldn't be touched.

The CRA / CERB situation is unfortunate. When CERB was announced, its problems were immediately pointed out. Now they're trying to fix them, rather than preventing them first...

Not only that, but they aren't doing a good job of fixing them. Going after folks who have already returned the CERB money doesn't make sense for example, but this is what is happening. I think it's this kind of incompetence that gets UBI more support than NI - the above issue can't happen with UBI, but it can with NI (e.g. if the CRA thought that a person's tax was incorrectly calculated and were not eligible for their refund, and tried to claw the refund back).

cazabon, 10 months ago

@abff08f4813c

You're right - EI also. Both EI and CPP are funded by both employer and employee (and it gets a little complicated for the self-employted), so at least in theory, they're not "benefits", but are funded by the users of the systems.

Whether that's actually practically true, and that they're not funded out of general revenue, is an argument for the accountants and actuaries.