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( 5 comments — Leave a comment )
Nov. 11th, 2015 10:26 am (UTC)
Negative income tax seems to be what a lot of the left's ideas about a "citizen's wage" amount to (at least any semi-coherent explanation of a what citizen's wage is that I've actually managed to track down). I've always sort of assumed, therefore, that it is wishful thinking magic economics, even though on the surface it looks plausible so it's interesting seeing it advocated by an organisation I assume is to the right rather than to the left of centre.
Nov. 11th, 2015 03:59 pm (UTC)
It's definitely a more market-based solution that traditional benefits regimes, and over the years the sort of people who have advocated it have been market enthusiasts like Hayek and Friedman. But it also avoids the more intrusive forms of means-testing.

In truth, you could probably make it either a leftist or a rightist policy simply by choosing different levels at which the tax becomes positive.
Nov. 11th, 2015 05:25 pm (UTC)
"...it also avoids the more intrusive forms of means-testing."

True, but it does lead to the big question of who gets the income.

And the even bigger one of "Hold on, I paid NI for 35 years to get a £7,000 pension; are you now giving people £X,000 a year for nothing?" :-)
Nov. 11th, 2015 06:06 pm (UTC)
Also true. Mind you, that myth is something I find quite annoying - the idea that National Insurance pays for _your_ pension as if it was some kind of defined contribution pension scheme. I can see why so many people think this - it's how politicians have always sold it - but it's ultimately just a tax, albeit one that the government has to put towards health and welfare spending.
Nov. 12th, 2015 08:46 am (UTC)
On the whole I'm in favour of policies (both in benefits and taxation) that simplify matters - I tend to assume that the savings in the costs of administration and enforcement and the reduction in barriers to entry overall outweighs the potential increase in free-loaders (especially given that the definition of a free-loader seems to be quite fraught both when talking about benefits claimants and people who minimise the tax they pay).

Though, I've no idea if negative income tax would simplify taxation. Probably not.

I wonder if the leftist/rightist aspect is more to do with language than anything else. After all the leftists call it a "citizen's wage" (or words to that effect) which frames it as an entitlement that the state owes to all citizens equally. While negative income tax frames it more as, as you say, a market solution to both protection of those in need and government finance.
( 5 comments — Leave a comment )