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To Beat Back Poverty, Pay The Poor

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To Beat Back Poverty, Pay the Poor

By TINA ROSENBERG

http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/

Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent...

The program, called Bolsa Familia (Family Grant) in Brazil, goes by different names in different places. In Mexico, where it first began on a national scale and has been equally successful at reducing poverty, it is Oportunidades. The generic term for the program is conditional cash transfers. The idea is to give regular payments to poor families, in the form of cash or electronic transfers into their bank accounts, if they meet certain requirements.

My comments: Citizen's Dividends and related ideas are the only way to broadly lift everyone up, the social reform of the 21st century. Brazil seems to be doing pretty well nowadays.

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Absolutely.

The US has already done this experiment for us by giving tax breaks to the rich. Would be no surprise if that extra money simply ended up being stashed in Bermuda. The rich certainly didn't go out buying or hiring. However, if people are struggling to get by already, reduce the tax burden on them and the extra money they receive will almost certainly be pumped straight back into the economy. It's not rocket science and while it does raise certain issues, is far more preferable than exacerbating a divide between haves and have nots, which is where we seem to be heading instead.

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Absolutely.

The US has already done this experiment for us by giving tax breaks to the rich. Would be no surprise if that extra money simply ended up being stashed in Bermuda. The rich certainly didn't go out buying or hiring. However, if people are struggling to get by already, reduce the tax burden on them and the extra money they receive will almost certainly be pumped straight back into the economy. It's not rocket science and while it does raise certain issues, is far more preferable than exacerbating a divide between haves and have nots, which is where we seem to be heading instead.

I am really suprised that the idea of a negative income tax / citizen's income as a repalcement for the myriad of inefficient and ineffective social programs isn't being discussed more often in political circles.

Both the left and the right should support an idea that will result in more money being available to help those in need because money will be delivered directly to people rather than chewed up in administration costs.

I suppose that the objection from the left will probably be one of control. The objections from the right will probably be that the system will end up being an additional program rather than a substitute.

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Sounds like socialism to me.

Stay well away.

Well a minimum wage, tax cuts for lower earners, aim for high employment, decent benefits system - Never understood this obsession with giving tax cuts to the well off from conservatives- Surely lower earners are going to spend all their money - and not stash it in an offshore bank account if your a millionaire.

One thing I agree with conservatives are tax cuts - but surely tax cuts need targeted correctly.

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Sounds like socialism to me.

Stay well away.

Whilst people are denied resources & land by the violence of the state imposing capitalist property laws

on everyone, then any gifts the people can claw back from their oppressors is fair game.

In the days of chattel slavery, a slave would scrounge as much from his master as he could so that he

could survive. To point out that the slave is literally taking from the work of the other slaves is to ignore

the situation the slave is forced into.

And if you want to call it socialism, then socialism is good, particularly in this context.

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Absolutely.

The US has already done this experiment for us by giving tax breaks to the rich. Would be no surprise if that extra money simply ended up being stashed in Bermuda. The rich certainly didn't go out buying or hiring. However, if people are struggling to get by already, reduce the tax burden on them and the extra money they receive will almost certainly be pumped straight back into the economy. It's not rocket science and while it does raise certain issues, is far more preferable than exacerbating a divide between haves and have nots, which is where we seem to be heading instead.

Reducing the tax burden on the poor and middle is a very good way to carry out the same plan. In fairness to the US there was a big tax cut deal last month that in addition to tax cuts to the rich, did provide tax cuts for everyone else too.

In most places, most people are poor and average income. And they spend the money to other poor and average people. So a little bit of money injected into an area can go around quite a lot, multiplying its impact. I agree with you that basically everything given to those struggling will go straight back into the economy.

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I am really suprised that the idea of a negative income tax / citizen's income as a repalcement for the myriad of inefficient and ineffective social programs isn't being discussed more often in political circles.

Both the left and the right should support an idea that will result in more money being available to help those in need because money will be delivered directly to people rather than chewed up in administration costs.

I suppose that the objection from the left will probably be one of control. The objections from the right will probably be that the system will end up being an additional program rather than a substitute.

One thing I find interestingis in the developing world many leaders seem in touch with their people, and carrying out real reform that is making a difference. While often western leaders seem dangerously out of touch with issues faced by their average citizen.

Like you have guys arguing over marginal tax rates or climate change when 1 million jobs are lost in an area.

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I thought this was going to be an article saying we need more benefits to combat poverty.

We don't but we do need exactly this type of benefits targeted squarely at poor families not the ridiculous middle class privileges we have set up in the UK.

It has only been 40 odd years since Milton Friedman was talking about a negative income tax and reducing the tax burden on the poorest.

On the subject of where to put your tax cuts - it is worth pointing out that every time the thatcher governments cut the upper rate of tax, the TOTAL TAX TAKE from higher earners increased mental, but true.

If you had a decent citizens dividend that guaranteed say an income of £7k per year per adult, then we could get rid of the minimum wage law, since it would be worth getting a job for £2 per hour as you would still end up with more money in your pocket and you wouldn't be destitute.

Think of all the employment that we could generate in that way. (particularly for the young NEETS) who would only need pocket money.

I am hoping very hard that IDS universal benefit might come close to this sort of thing. (we could afford it too 50% flat tax and a £14k personal allowance)

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One thing I find interestingis in the developing world many leaders seem in touch with their people, and carrying out real reform that is making a difference. While often western leaders seem dangerously out of touch with issues faced by their average citizen.

Like you have guys arguing over marginal tax rates or climate change when 1 million jobs are lost in an area.

One of the reasons why I think the Tories benefit slashing is ill considered. Benefits in the UK need redefining, especially as the labour is no longer required.

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Dont give it to the poor. Give it to everyone. As others have said this is the point of a citizens income. With the amount of red tape that would be removed ? I cannot see how it would be more expensive. Most likely even save money.

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I did some quick "fag packet" calculations on a citizens income. And hope this will demonstrate why such a policy would lead to a massive increase in employment (and low skilled employment as well, which would be handy)

Imagine we have someone working for minmum wage (£5.85 per hour)

They work 40 hours per week 52 weeks per year (they cant afford to take holidays)

They earn £12168 per year and take home £10320

Imagine a 7k citizens income and a 50% income tax on all earnings. (I have calcs that say this should be affordable)

To get the same take home pay (£10320) you now need a job that pays £3.20 per hour.

The important bit is this:

Cost to employer under old system (£12,994 per year due to employers NI)

Cost to employer under new system (£6,640 per year)

An employer could either pay that person whole lot more or employ twice as many people for the same cost.

how would that not be a good thing?

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To Beat Back Poverty, Pay the Poor

By TINA ROSENBERG

http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/

My comments: Citizen's Dividends and related ideas are the only way to broadly lift everyone up, the social reform of the 21st century. Brazil seems to be doing pretty well nowadays.

I am sure British Welfare state was tremendously helpful when it was introduced too.

This sort of plan does work immediately, and then for a while, until people realise that there is a free ride to be had and exploited it - more so when the border is opened (EU)

and there is plenty of human right legalisation that goes with it.

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I did some quick "fag packet" calculations on a citizens income. And hope this will demonstrate why such a policy would lead to a massive increase in employment (and low skilled employment as well, which would be handy)

Imagine we have someone working for minmum wage (£5.85 per hour)

They work 40 hours per week 52 weeks per year (they cant afford to take holidays)

They earn £12168 per year and take home £10320

Imagine a 7k citizens income and a 50% income tax on all earnings. (I have calcs that say this should be affordable)

To get the same take home pay (£10320) you now need a job that pays £3.20 per hour.

The important bit is this:

Cost to employer under old system (£12,994 per year due to employers NI)

Cost to employer under new system (£6,640 per year)

An employer could either pay that person whole lot more or employ twice as many people for the same cost.

how would that not be a good thing?

Because somebody will figure out that if they have 10 kids and uses 20 fake IDs, they will be on £210k a year. Get away with this for 5 years

and then can then move abroad and retired a millionaire.

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Because somebody will figure out that if they have 10 kids and uses 20 fake IDs, they will be on £210k a year. Get away with this for 5 years

and then can then move abroad and retired a millionaire.

Rubbish.

Simplifying the system will make fraud more difficult.

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Because somebody will figure out that if they have 10 kids and uses 20 fake IDs, they will be on £210k a year. Get away with this for 5 years

and then can then move abroad and retired a millionaire.

Um - only adults get a citizens income - not kids, so that would be colossally stupid. (No Child Benefit under a universal benefit system)

So max benefits for a couple = £14k and ANY job will make you better off.

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Um - only adults get a citizens income - not kids, so that would be colossally stupid. (No Child Benefit under a universal benefit system)

So max benefits for a couple = £14k and ANY job will make you better off.

Point #1. There are roughly 50M adults in the UK and £7K per adult annual benefit adds up to £350Bn annually.

This just slightly less than Income Tax+NI+excise+corp tax+business rates combined (150+99+43+46+25=363) and only leaves £548-£350=£198Bn for everything else.

Defense+NHS+debt servicing+police+education projections are 40+122+44+35+89=£330Bn extra. We can leave alone transport, housing, industry+agriculture+other for now.

Where is the money coming from? Or do you advocate increase in govt borrowing?

Point #2. Once "free money" is announced, expect MASSIVE increase in immigration from all over EU. UK cannot stop them without leaving EU, do you advocate leaving EU as well?

Point #3. Before someone calls me a statist etc please answer points #1 and #2 above with numbers and links to source data.

Edited by matroskin

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Brazil: The biggest reason the poor in Brazil, hasn't that got something to do with giving land to the poorest? Or was that Argentina. I think it was Brazil?

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Point #1. There are roughly 50M adults in the UK and £7K per adult annual benefit adds up to £350Bn annually.

This just slightly less than Income Tax+NI+excise+corp tax+business rates combined (150+99+43+46+25=363) and only leaves £548-£350=£198Bn for everything else.

Defense+NHS+debt servicing+police+education projections are 40+122+44+35+89=£330Bn extra. We can leave alone transport, housing, industry+agriculture+other for now.

Where are the money coming from? Or do you advocate increase in govt borrowing?

Point #2. Once "free money" is announced, expect MASSIVE increase in immigration from all over EU. UK cannot stop them without leaving EU, do you advocate leaving EU as well?

Point #3. Before someone calls me a statist etc please answer points #1 and #2 above with numbers and links to source data.

Only British citizens get Citizens Income.

There's a clue in the name.

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Only British citizens get Citizens Income.

There's a clue in the name.

Leaving alone MASSIVE litigation based on EU and UK human rights legislation, expect quid pro quo. 5.5M Brits abroad will stop getting their benefits and will no longer be entitled to any future foreign benefits, many will be coming back home. Assuming same adult/child ratio, 5.5 * 50/60 = 4.58M will be claiming this benefit from abroad which will add 4.58M * 7K=32B to the cost of such benefit.

Or do you advocate that Brits leaving abroad returning back to the UK and pushing UK house prices even higher?

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My comments: Citizen's Dividends and related ideas are the only way to broadly lift everyone up, the social reform of the 21st century. Brazil seems to be doing pretty well nowadays.

Depends a lot where you start from.

I don't know enough about Brazil to comment. But if Brazil can learn from our historic experience - how introducing welfare alleviates immediate poverty but brings its own problems to follow - they could be onto a good thing. Especially if they can avoid the rampant corruption that follows inevitably on our levels of complexity and means-testing.

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Dont give it to the poor. Give it to everyone. As others have said this is the point of a citizens income. With the amount of red tape that would be removed ? I cannot see how it would be more expensive. Most likely even save money.

Completely agree.

I am against big state and so on, but the problem now is that there is no need for the workers anymore. Humans are not self sufficient anymore by and large.

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Point #1. There are roughly 50M adults in the UK and £7K per adult annual benefit adds up to £350Bn annually.

This just slightly less than Income Tax+NI+excise+corp tax+business rates combined (150+99+43+46+25=363) and only leaves £548-£350=£198Bn for everything else.

Defense+NHS+debt servicing+police+education projections are 40+122+44+35+89=£330Bn extra. We can leave alone transport, housing, industry+agriculture+other for now.

Where is the money coming from? Or do you advocate increase in govt borrowing?

Point #2. Once "free money" is announced, expect MASSIVE increase in immigration from all over EU. UK cannot stop them without leaving EU, do you advocate leaving EU as well?

Point #3. Before someone calls me a statist etc please answer points #1 and #2 above with numbers and links to source data.

The citizen's income would form part of taxable income. It is granted universally to get rid of administration costs but also included in income. If the average income tax rate is 20%, the cost of 10k per adult after tax is about 400 bn.

The spending on social services is in the region of 250 bn. That leaves a shortfall of about 150 bn.

The value of all land and improvements in the UK is about 5 tn. A 2% annual tax on this would raise about 100 bn which is about 75 bn more than we currently collect in council tax.

Now we are looking for about 75 bn. Quite a bit of this could probably be met with efficiency savings etc.

A citizen's income is roughly affordable.

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