Friday, December 04, 2015

*Very* Negative Income Tax

Recently, news broke out that "The mayors of the two biggest cities in Canada's most right-leaning province are sounding very sympathetic to a guaranteed minimum income."

Actually, and even though I fully support philanthropy and charitable thinking, I completely oppose this idea.

Namely, I believe that the act of "handing out money", with the exception of very specific emergency-type cases like someone needing an urgent surgery or meds etc, is very poor form.

While the article tries to downplay the possible economic and societal negative impacts of this, while trying to emphasize or sweeten some very specific and unlikely good side-effects, the truth is that handing out actual cash is never a good thing

When someone is suffering somewhat less fortunate circumstances, mechanisms should be in place to provide them with the necessities until they are capable of going back to the workforce. It should also help make that happen directly by providing training and temporary earning schemes for said individuals.

This creates an incentive to do so (because said individuals would not be enjoying the same freedom that a working, money-earning person has in spending his earnings in whatever way they see fit). By giving out actual cash, you eliminate this incentive and as mentioned in the article, you introduce a few opposite inclinations (tendency to longer periods of unemployment, scheming to con the system into handing out more cash by obfuscating one's income, pooling incomes of a household, etc).

Granted, in some cases the mechanisms provided (example: homeless shelters) suffer from issues of their own that make it somewhat inhumane to ask people to go live there for example. However, the answer is not to hand people money to go live somewhere else but rather, to *FIX* said issues. Two wrongs do not make a right.

The concept of greater good should always be the primary concern for governments. That said, to think about making someone less fortunate "as comfortable as humanly possible" is a somewhat selfish view (I know it sounds strange to say this, but look at it from the big picture perspective, not from that one individual's perspective and you will know what I mean). A proud, strong and successful society's fabric is woven from individuals that were made to be as productive as possible for their circumstances. Handing out cash will never facilitate this and in fact will diminish it.