Originally Posted by Marcus1124

This is not a new idea, just a new name for it. It is called the "negative income tax" in its most serious iteration in this country.

While I steadfastly oppose government taking the hard earned money from people merely to give it to another, IF we are going to do it, this would be the most sensible and efficient way to do it.

That said, there would have to be incredibly strong safeguards against the majority voting themselves every increasing "entitlement" on the backs of the minority.

Originally Posted by Mad_Michael

Dilletante makes a good point also about the regressive character of consumption taxes hitting the poorest the hardest (proportionally).

Originally Posted by Dilettante

But what happens to these people at the bottem rung of the economic ladder when their income from the government drops significantly and at the same time the tax on consumables shoots up? The dropping of the income tax will not be a major factor for them, because most countries have severely limited or almost no taxes on the lower-class already.

I imagine this scheme will be accused of being some socialist-bleeding-heart-handout program. But by my reading, the people on the bottom are the ones who are most likely to get burned by it. They're the ones who spend the majority of their income on consumables and they're the ones who can't afford to lose social security.

Originally Posted by Mad_Michael

Luckily, it was only my secondary argument. My principal argument still stands. Giving away money is non-productive and thus counter-productive in principle.

Originally Posted by WarOnIgnorance

Quick question: Why is it bad to give poor people money for nothing while it's A ok to give rich people money for nothing (interest on capital) ?

Originally Posted by WOI

The latter is not a law of nature, it's a human invention with a very specific purpose (enriching the rich). I'm sure I don't need to explain its historical background to you

Originally Posted by WarOnIgnorance

I'd like to address this point separately. You guys are talking about the group of the second lowest from the bottom. The lowest have zero income, null, nada (officially). Despite all the rhetoric about socialist Europe, and their absence from official statistics, there are tons of these people (guesstimate : 2 à 4%). They get by with odd jobs in the 'unofficial' economy, small time crime and such. This is also the part where the slight reduction in crime would come from : at least these people wouldn't need to engage in crime for mere sustenance.

One of the incentives of Vivant is no doubt to incorporate the 'unofficial' economy into the official one. The former is huge here due to the high taxation of labour. Note that I'm not talking about organized crime, drug traffic or such, but about unreported and thus untaxed 'normal' business activities. The redirection towards consumption tax also has this in mind, no doubt.

Originally Posted by danielpalos

I think a universal income scheme that is based on the theory of supply and demand will probably work better than our current socialist or capitalist economies that we currently have.

Originally Posted by WarOnIgnorance

I'd like to address this point separately. You guys are talking about the group of the second lowest from the bottom. The lowest have zero income, null, nada (officially). Despite all the rhetoric about socialist Europe, and their absence from official statistics, there are tons of these people (guesstimate : 2 à 4%). They get by with odd jobs in the 'unofficial' economy, small time crime and such. This is also the part where the slight reduction in crime would come from : at least these people wouldn't need to engage in crime for mere sustenance.

One of the incentives of Vivant is no doubt to incorporate the 'unofficial' economy into the official one. The former is huge here due to the high taxation of labour. Note that I'm not talking about organized crime, drug traffic or such, but about unreported and thus untaxed 'normal' business activities. The redirection towards consumption tax also has this in mind, no doubt.

Originally Posted by WarOnIgnorance

A small Flemish political party, called Vivant, member of the Basic Income European network, has a socio-economic program that is a startling mix of socialism and capitalism. Interestingly, the creator of this party is a very succcesful businessman.

The basic idea is that each and every person in society receives a governmentally issued basic income. The figure they propose -but which is open to adjustement- is 500€ (about 635$ today). This right is to be understood as unalienable. No matter what the person does or occupies herself with, this allowance is received. So far the socialist part.

The first effect of this right is that a whole range of governmental systems becomes obsolete (unemployment benefit administration and control, the vast bureaucracy of social security becomes redundant, etc...), thus freeing the funds required to keep this sytem in business.

Of course this basic income can be augmented by the wages from a job. This wage is then exempt from income tax (as is the basic income) and free to 'market forces'. There are also no social security payments on the part of the employer, thus rendering employment more flexible than it currently is.

The funding for the basic income is to come from an increased consumption tax (VAT in Europe), which also puts the responsability for the destruction of the ecosystems where it belongs, viz. with the large consumers.

Another side-effect, Vivant claims, is a (IMO slight) decrease in criminality as the basic income garantuees sustainability and reduces poverty.

There's more to the party : http://www.vivant.org/site/fileadmin.../Manifesto.pdf
but this is its main idea.
Does it sound viable ?

Originally Posted by Marcus1124

Because paying interest on capital is not giving rich people money for nothing. It is compensation for them NOT using the capital for something else (i.e. spending it, burying it in their yard, investing it in other endeavours).

Originally Posted by Marcus1124

If you had even a basic understanding of economics you would know that you pay interest on borrowed capital for the same reason people are paid to work; opportunity costs. If a person sits around doing nothing, the don't get paid (same as capital).

Originally Posted by Marcus1124

And for the record, nobody is forced to pay interest. You are perfectly welcome to go out there and try to borrow money interest free. Good luck with that. Or do you think that we should make it against the law to charge interest?

Originally Posted by liberty1776

How about this one:
End the government. That way taxes are ended, too.

Originally Posted by liberty1776

This idea sounds kind of silly. People will still make money off the backs of others. Is $635 is enough to live on (which seems like the whole point of the program), what incentive do people have to work?

Originally Posted by liberty1776

On top of all this, if everyone is "making" the same $635, the gov't has no ways to use class wars to gain support. In other words, it would NEVER stay as simple as described.

Originally Posted by Mad_Michael

Still doesn't address the critique that consumption taxes proportionally hit the lowest the hardest. It doesn't matter if they are the lowest or the second lowest on the tier - fact is, this tax system is punishing to the poorest. They would be likely to be worse off (more income and way more taxes to pay).

Originally Posted by Dilettante

As MM mentioned, this "lowest" rung will suffer the most from such a scheme. Presumably they currently receive some sort of state-sponsered welfare. And they, above all others, need it to survive.
Vivant, by demanding that all citizens, regardless of need, recieve the same basic income will necessarily slash the benefits recieved by these at the bottom because the money that used to go to them in benefits (or, by the numbers you mentioned ~115% of that money) will be distributed among the entire population as "basic income".
At the same time as their economic inflow from the government decreases, the price of their purchases will rise due to the new consumption tax.
This group, which suffers the most (percentage-of-income-wise) from the consumption tax will be the one least effected by the decrease in the income tax.