Earned Income Tax Credit: A Conservative answer to UBI? (employment, wage, attorneys)
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I wanted to start a thread about EITC as a counterpoint to the idea of UBI which is starting to become more popular these days. One thing that Corona-virus seems to have shown us is that it's far more efficient for the government to send out money than to start up costly, wasteful bureaucracies to "help" those who are struggling. With this experience, I wanted to pose a counter-proposal to the UBI trend that's already in existance:
The Earned Income Tax Credit already exists within the IRS code and helps people who earn very low incomes receive a "bonus" that can go towards their living expenses. My proposal is that rather than experiment with UBI or child tax credits that we expand and up the amounts of the EITC so that people can be rewarded for working rather than just being given a check for free. I do realize many are struggling and do in fact need a hand up, however the reality is that just giving away free money not only is expensive, but can be a true determent to people finding a job and building their skill set. EITC can be geared so that the more hours you work the more you earn helping people to both escape poverty as well as turbocharge the economy.
I wanted to start a thread about EITC as a counterpoint to the idea of UBI which is starting to become more popular these days. One thing that Corona-virus seems to have shown us is that it's far more efficient for the government to send out money than to start up costly, wasteful bureaucracies to "help" those who are struggling. With this experience, I wanted to pose a counter-proposal to the UBI trend that's already in existance:
The Earned Income Tax Credit already exists within the IRS code and helps people who earn very low incomes receive a "bonus" that can go towards their living expenses. My proposal is that rather than experiment with UBI or child tax credits that we expand and up the amounts of the EITC so that people can be rewarded for working rather than just being given a check for free. I do realize many are struggling and do in fact need a hand up, however the reality is that just giving away free money not only is expensive, but can be a true determent to people finding a job and building their skill set. EITC can be geared so that the more hours you work the more you earn helping people to both escape poverty as well as turbocharge the economy.
What are your thoughts?
Many people cannot work for a number reasons - illness, lack of childcare etc. The UBI is used to buy food and services so it goes right back into the money supply and boosts the economy. We need both.
I wanted to start a thread about EITC as a counterpoint to the idea of UBI which is starting to become more popular these days. One thing that Corona-virus seems to have shown us is that it's far more efficient for the government to send out money than to start up costly, wasteful bureaucracies to "help" those who are struggling. With this experience, I wanted to pose a counter-proposal to the UBI trend that's already in existance:
The Earned Income Tax Credit already exists within the IRS code and helps people who earn very low incomes receive a "bonus" that can go towards their living expenses. My proposal is that rather than experiment with UBI or child tax credits that we expand and up the amounts of the EITC so that people can be rewarded for working rather than just being given a check for free. I do realize many are struggling and do in fact need a hand up, however the reality is that just giving away free money not only is expensive, but can be a true determent to people finding a job and building their skill set. EITC can be geared so that the more hours you work the more you earn helping people to both escape poverty as well as turbocharge the economy.
What are your thoughts?
I would disagree on the assessment that the Corona-virus has shown efficiency in giving money to individuals. I would almost argue it has shown us the opposite. How many federal, state and local ordinances are now charged with keeping people from being evicted...schedules on how much needs to be paid when and at what income levels different sets of rules apply. Yet, didn't everyone just get 3 stimulas checks? Meanwhile every port on the Pacific Coast is backed up trying to get cargo containers filled with imports in.
The reality is a great number of the poor are poor at least in part because they are bad at managing money, not just that they don't have money. That's why the cumbersome programs have to exist....because it takes a lot to care for these people. The programs walk a tightrope act of getting people the staples they need without driving out units that otherwise would go to the tier just above those on assistance.
Administratively, simply sending a check to everyone would be much easier....but look at what occurs when that happens. Inflation. Not just inflation, but inflation in an economy with one of the lowest employment participation rates that hasn't been seen since the country was leaving the single breadwinner style economy.
I do realize there are other factors, and perhaps exploring the EITC is something to do, but the premise underlying the debate appears flawed. Now, there's an argument that people's behavior would change over time. When she was a young artist, I used to send my sister cash for her birthday and almost regretted it. It would be parlayed into a vacation that inevitably sent her further into debt. Then she settled down and started paying bills. Now she has her basics handled and saves quite a bit of it....but one time consumption of imports from local stores isn't what helps the economy. Capital investment that increases utilization for all is your best capital stimulus. The good paying jobs created from such things are the main benefit to the people.
I wanted to start a thread about EITC as a counterpoint to the idea of UBI ...
What are your thoughts?
That NEITHER approach actually does anything to solve the real problem:
an over supply of no/low skilled warm bodies suppressing their fair market value wage rates.
The problem has been creeping up the food chain to similarly affect the more skilled.
I want none of this and only an annual flat tax on income.
A certain percentage (not sure of exact amount but lets say 15-17%) paid by anyone that earns a paycheck with zero deductions at all. Everyone pays the same percentage, no matter if you make 200 dollars a year or 200,000 dollars a year.
This would end the govt's use of our tax system as a punishment and rewards system for their voters and simplify everything for everyone. No more need for a thick binder of tax laws that nobody understands.
Right now, the bottom half of wage earners in America pays only 3% of all federal taxes collected. This is not sustainable and neither is constantly asking the higher earners to pay more, while the lower earners pay almost nothing.
No more need for tax attorneys or hiring professionals to figure out your maze of tax nightmares either.
This is the only real fair solution...if you think about it.
Earn such a low pay rate (mixed avg) that these people pay...
Quote:
...pays only 3% of all federal taxes collected.
And of this lowly 3% being paid by the bottom 1/2...
it's only the top 1/3 of the bottom half (that's ~15% of the whole) who do that paying.
eta: And the main reason they don't pay more are FMV wage rates held down by the teeming mass at the bottom.
Quote:
This is not sustainable ...
No argument here.
The bottom 35% of the whole should remedy this by... ...? Bueller? bzzzt! It's A Trick Question.
If the bottom 1/3 were able to self direct changes and improvements they wouldn't be the bottom 1/3.
And for most intents and purposes... they are and shall remain economic deadwood.
Allowing this pattern to continue, over producing net consumers, is Not Sustainable.
The REAL questions?
1) What will become of the children of these people? (The parents have already blown their chance already)
2) What can be done to radically limit their numbers to what might actually succeed in life?
Last edited by MrRational; 08-09-2021 at 08:18 AM..
Earn such a low pay rate (mixed avg) that these people pay...
And of this lowly 3% being paid by the bottom 1/2...
it's only the top 1/3 of the bottom half (that's ~15% of the whole) who do that paying.
eta: And the main reason they don't pay more are FMV wage rates held down by the teeming mass at the bottom.
No argument here.
The bottom 35% of the whole should remedy this by... ...? Bueller? bzzzt! It's A Trick Question.
If the bottom 1/3 were able to self direct changes and improvements they wouldn't be the bottom 1/3.
And for most intents and purposes... they are and shall remain economic deadwood.
Allowing this pattern to continue, over producing net consumers, is Not Sustainable.
The REAL questions?
1) What will become of the children of these people? (The parents have already blown their chance already)
2) What can be done to radically limit their numbers to what might actually succeed in life?
But the issue of "fairness" seems to rear its head over and over in the media.
Is it "fair" that only the top earners pay income taxes and almost half the country skates on this?
I love how certain politicians say "tax cuts for the wealthy" as if this is to gin up support from the poor. Well...hello...the poorer voters are probably not paying income taxes to begin with. A tax cut is for tax PAYERS.
If we had a flat tax with no deductions, this type of nonsense would go away and the politicians could no longer use the tax system as a punishment and rewards system or as a dividing tool.
Maybe, if everyone paid the same percentage, some would start paying more attention to how and where our govt vomits the public's money all over the place and some of the waste would subside.
The people would benefit from a flat tax with no deductions...not the govt. Which is why we will never see such a system take root.
But the issue of "fairness" seems to rear its head over and over in the media.
That's usually a sign of moral ambiguity or just being plain old uninformed.
Of course there are also those with some other agenda altogether as well.
Quote:
Is it "fair" that only the top earners pay income taxes and ...?
Mostly so. Afterall... who else are you going to tax?
All they have to do is start spreading the wealth more ... and more of the others will be able to pay more too.
I don't see many of them (you?) volunteering to do this. And haven't for decades now.
It's also "fair" to say the high earners have already gotten a real good deal. For decades now.
And it's also "fair" to say that most of the imbalance problem between have and have-nots
are nearly all rooted in the political and social actions of those same high earners and other social conservatives..
Uh oh....there goes that "spread the wealth" nonsense.
Well, if the poorer people are not having to pay income taxes and I am...isn't THAT enough "spreading" for you?
Also, how does anyone begin to think it is moral for those that work harder and are smarter with their earnings to be forced to pay money to those that refuse to work hard or make bad choices?
No...everyone should have some skin in the game and pay a percentage of their earnings. We all use public services...we all should pay for them.
Uh oh....there goes that "spread the wealth" nonsense.
Oh.
Quote:
how does anyone begin to think it is moral for those that work harder and are smarter with their earnings to be forced to pay money to ...
To the commonweal? The question (as I see it) is what that money is use for.
Supporting people who won't (or even can't) do for themselves? Not a fan any more than you are
.
Quote:
Well, if the poorer people are not having to pay income taxes and I am...
isn't THAT enough "spreading" for you?
No, it's not. Not even close. It misses the point altogether.
The point is not that we have some poor among us...
it's about how many (MILLIONS!!) are unable to do for themselves let alone for any dependents.
And how even fewer no/low skill "jobs" will be available to this class of person into the future...
and just WTF! are we (We The People) going to do about having another 100Million too many people?
(we already have 100M too many now)
See... if we didn't have all this deadwood cluttering up things...
we wouldn't need the welfare state to support them cradle to grave.
Delete the expense and the taxes required to pay it... and it's like getting a pay raise.
Sort that out and then we can watch our tax bills drop but it won't happen before then.
This reality, the conflict vs sensible population numbers, is WHY the thinking shifted to UBI.
Solve the actual problem.
Last edited by MrRational; 08-09-2021 at 10:52 AM..
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