[Mars]

Speaking personally, I'd much rather have my money taken by government based on my habits of spending rather than my habits of working.  In other words, pay into the system for what I take out of it.

This.    You also have to realize there there's absolutely no motivation for poorer people to better themselves as things stand now.  All they stand to do is lose all of their rebates, start getting hammered with taxes, and lose their health benefits.  And then when disaster strikes, they aren't eligible for help because they actually have scrabbled together something resembling assets and thus are disqualified.

As it stands I'm making around $10,000 per year and getting taxed 15%

The instant I finish my RN I can get a $40,000 a year job and get taxed around 20%

Clearly, I have a lot of reasons to improve myself.

[666maslo666]

You also have to realize there there's absolutely no motivation for poorer people to better themselves as things stand now.  All they stand to do is lose all of their rebates, start getting hammered with taxes, and lose their health benefits.  And then when disaster strikes, they aren't eligible for help because they actually have scrabbled together something resembling assets and thus are disqualified.

This. And solution? Income tax + Negative Income Tax (Basic income welfare decreased by 10% of own income, not all taken away when one gets any little income). That is the basis of tax and welfare reform we are going to implement here in Slovakia. We can even abolish minimum wage, since BI would kinda act like it - noone would be forced to work for arbitrary minimum wage or be hungry, but if someone wants to work for little, he will can.

Consumption taxes wont allow you to integrate welfare and tax system into one solution continually adressing the transition from lack of income to high income, so I think one income tax (not progressive) is better from pragmatic POV.

[General Battuta]

Substantiate the claim that there's no motivation for poorer people to better themselves. jr2 was unable to substantiate it so he gave up and left. Can you do better?

[Mustang19]

Ahk, that's not the way it works. In the absence of evidence that poor people want to "better themselves" (make more money) then that proves poor people don't have motivation to do so.

I mean it really depends on your expectations. If you're cool with living in a car and working part time at Wal Mart then you're already good to go.

The thing is, unless taxes equal or exceed 100% of your income you can always make more money working more. Unless handouts get involved.

[General Battuta]

I think the cycle of poverty probably works for reasons distinct from 'I want to stay on welfaaaare', and I'm not seeing any evidence presented to back up these assertions that it DOES operate on that principle. Obviously there are people who are never going to get anywhere because they're lazy, but I don't think you can claim that the tax/welfare system is keeping people in poverty because they'd make less by making more.

[Mustang19]

I think the cycle of poverty probably works for reasons distinct from 'I want to stay on welfaaaare', and I'm not seeing any evidence presented to back up these assertions that it DOES operate on that principle. Obviously there are people who are never going to get anywhere because they're lazy, but I don't think you can claim that the tax/welfare system is keeping people in poverty because they'd make less by making more.

I've known people who wanted to avoid working for precisely that reason. There are situations where welfare benefits exceed what you could be making at minimum wage. With unemployment benefits especially there's an incentive to not take up part time work.

[General Battuta]

Yeah but post-Clinton that generally isn't very sustainable.

[Mustang19]

Yeah but post-Clinton that generally isn't very sustainable.

You still know exactly the time frame that your benefits will last. Security is also an issue because you risk losing your income if you go off benefits to get a job, and then get laid off. And hey what's the deal with Nuke? He claims to be living off the government.

[General Battuta]

Yeah but post-Clinton that generally isn't very sustainable.

You still know exactly the time frame that your benefits will last. Security is also an issue because you risk losing your income if you go off benefits to get a job, and then get laid off.

I'm not necessarily going to dispute the notion that this COULD occur, I just want to know how often it does. There are some sweeping generalizations being made about the tax/welfare system and they don't have much backing as is.

And hey what's the deal with Nuke? He claims to be living off the government.

alaska

[Mustang19]

No idea. I've only been on parental welfare myself. If I had to guess though I'd say that most people prefer to have a job for something to do during the day regardless of anything else. The number of people on welfare who don't want to work is probably a minority and they must be very bored. Hell, there are probably more people living off of inheritance than on welfare they don't need. All I have are first and second hand stories, though, not numbers. If you really are curious and not just picking a fight there should be a google search bar to the upper right of your browser.

One specific example I can think of that is kind of relevant is social workers sterilizing black mothers in the 70s to keep them from having children that welfare had to pay for. Now if someone tried this deliberately it might be an effective strategy to push yourself under the poverty line in order to collect welfare. Too bad I can't get pregnant.

[jr2]

Substantiate the claim that there's no motivation for poorer people to better themselves. jr2 was unable to substantiate it so he gave up and left. Can you do better?

Batts, I love people like you.  You make the world a better place... so full of kindness and good will.


Let's see.  If you're making a small enough amount to qualify for food stamps, free health insurance, housing assistance, HEAP (Heating assistance), and probably a few other things, your NEEDS are met.

If you take a job at Wal-Mart and make minimum wage, all of a sudden your benefits disappear. If it's winter, now YOU have to pay $600+ for heat.  Plus you probably now have to have a car to get to work.  Which uses GAS and requires REPAIRS, which are expensive.  Now you have to pay RENT, and the UTILITIES.  You have to buy groceries to EAT.  You have to pay for MEDICAL INSURANCE through your employer.

None of this would matter IF you actually made enough to smoothly pay off any and everything that you owe.  If you don't, you are in for some turbulence.


EDIT: And of course the person living on welfare can always illegally work under the table for cash.  If you get a real job, they report your income to the IRS.

[General Battuta]

Batts, I love people like you.  You make the world a better place... so full of kindness and good will.

I think drawing conclusions about someone from a sentence in a forum post on the internet is probably a bit hasty.

Let's see.  If you're making a small enough amount to qualify for food stamps, free health insurance, housing assistance, HEAP (Heating assistance), and probably a few other things, your NEEDS are met.

If you take a job at Wal-Mart and make minimum wage, all of a sudden your benefits disappear. If it's winter, now YOU have to pay $600+ for heat.  Plus you probably now have to have a car to get to work.  Which uses GAS and requires REPAIRS, which are expensive.  Now you have to pay RENT, and the UTILITIES.  You have to buy groceries to EAT.  You have to pay for MEDICAL INSURANCE through your employer.

None of this would matter IF you actually made enough to smoothly pay off any and everything that you owe.  If you don't, you are in for some turbulence.

Ditch the bold, it's unnecessary. Calm down, too.

How does this translate into there being no incentive in the current tax structure for the poor to get less poor? And while it's a nice hypothetical scenario, where's the data? That's what I'm asking for: population statistics to demonstrate the behavior you're postulating.

[Mustang19]

http://money.msn.com/how-to-budget/can-you-live-on-330-a-week-mainstreet.aspx

A fraction of a paycheck

The goal of the unemployment insurance program, according to the Center on Budget and Policy Priorities, is to provide people with about half their normal wage. However, it almost never works out that way. The average American collected $295 in weekly unemployment benefits in the third quarter of 2010, according to the most recent government data. But the average weekly salary in that same quarter was $865, which means the jobless benefits replaced just over a third of the average worker's salary.

So $295 a week in unemployment, after leaving what probably wasn't a minimum wage job in most cases.

ed: dammitedit: And this only counts unemployment, not any other assistance or charity like Medicaid.

Federal minimum wage: $7.25 an hour
Working 35 hours a week: $253.75

So you can see that you may be better off just collecting welfare, particularly if your job doesn't offer enough hours.

edit: And this just counts unemployment, not any other assistance or charity you might get like Medicaid.

[General Battuta]

No no I get that, I'm actually willing to believe it, but:

1) jr originally proposed this as a problem with the tax structure and I don't see how you can argue that, this is a welfare issue primarily

2) we don't know if it's an issue at all until we know how many people are intentionally using this tactic.

[Mustang19]

1) jr originally proposed this as a problem with the tax structure and I don't see how you can argue that, this is a welfare issue primarily

It could be. Sales tax rebates (like under Huckabee's fair tax) might provide enough rebates to the poor to push some people above the poverty line. Although all taxes themselves can do is reduce the incentive to work, not eliminate it, unless they go past 100% income.

2) we don't know if it's an issue at all until we know how many people are intentionally using this tactic.

I don't know if there are even studies on this but I knew someone who claimed that she didn't want to take up work because she earned more with welfare. So that's one person in the world, possibly. But considering even McDonalds employees make about $9 an hour I don't think this happens often.

[BrotherBryon]

This is more of a social programs issue than a tax one. I however can see where a sales/services tax system may encourage those currently living off the welfare system to better themselves as then every one would be paying said taxes for anything they may need or desire. Hence knowing that they must find work to pay for things that are beyond the simple necessitates that social programs should justifiably pay for. That being said the whole social program network needs a revamp as well. It is grossly inefficient with little to no accountability but that is another discussion entirely.

[Unknown Target]

This is more of a social programs issue than a tax one. I however can see where a sales/services tax system may encourage those currently living off the welfare system to better themselves as then every one would be paying said taxes for anything they may need or desire. Hence knowing that they must find work to pay for things that are beyond the simple necessitates that social programs should justifiably pay for. That being said the whole social program network needs a revamp as well. It is grossly inefficient with little to no accountability but that is another discussion entirely.

If you can get your housing and food paid for by social welfare, what else do you need? You can get the rest of what you want by working small jobs or dealing with illegal things.

Food and housing are basic, justifiable needs. If not housing then at least food. But at that point you have gypsies - which I don't see a problem with. I say our whole system of qualifications for these need programs is really warped and badly managed. Why not just let people apply if they feel the need, or even let anyone state their case for community aid?

[karajorma]

I think you're arguing the wrong thing here Batt. What you should be asking is why would these poor people be better off under a system with no income tax?

Using the figures Mustang posted someone on benefits earns $295 and someone working 35 hours minimum wage earns $253.75. Even if you abolish income tax someone would still be better off staying at home according to their arguments.

So in other words the entire argument is completely inapplicable to the matter of whether or not we should scrap income tax.

[General Battuta]

I think you're arguing the wrong thing here Batt. What you should be asking is why would these poor people be better off under a system with no income tax?

Using the figures Mustang posted someone on benefits earns $295 and someone working 35 hours minimum wage earns $253.75. Even if you abolish income tax someone would still be better off staying at home according to their arguments.

So in other words the entire argument is completely inapplicable to the matter of whether or not we should scrap income tax.

That is also a fair point. But I'm still waiting for those statistics, damn it.

[Unknown Target]

I think you're arguing the wrong thing here Batt. What you should be asking is why would these poor people be better off under a system with no income tax?

Using the figures Mustang posted someone on benefits earns $295 and someone working 35 hours minimum wage earns $253.75. Even if you abolish income tax someone would still be better off staying at home according to their arguments.

So in other words the entire argument is completely inapplicable to the matter of whether or not we should scrap income tax.

That is also a fair point. But I'm still waiting for those statistics, damn it.

Maybe you should start thinking about it logically instead of just relying on one number being higher or lower than another?