Under the nuclear family approach, children over 18 living with their parents are considered separate families and can qualify independently, regardless of their parents’ income. This raises equity concerns because it may result in disproportionate benefits for high-income families.
In contrast, the economic family definition uses the combined income of all related individuals living in the same household, providing a more comprehensive and equitable basis for assessing eligibility.
So, if my daughter lives in my house, we’re all related, and thus one economic family.
But, if my daughter moves into my neighbor’s house, and their son moves into my house, we’re now four economic families?
How about once a month, we just direct deposit the same amount into the bank account of each and every person over the age of 18?
I had previously moved more towards a negative income tax approach rather than a universal basic income. The latter seems to be consistently found to be too expensive to implement universally, and how does it make sense to give the basic income to someone who’s currently a billionaire or even a millionaire? (Ok, if a former millionaire loses it all and ends up deep in debt, that’s a bit different, but that’s why I’m limiting to current millionaires.)
That’s why I found this,
which found it is possible to halve previously projected costs while maintaining or even increasing its poverty-reduction impact.
To be so intriguing. Alas,
The PBO, therefore, confirms the P.E.I. report’s conclusion that it is possible to roughly halve the cost of a basic income program for Canada and each province by using the economic family definition instead of the nuclear family.
Basically, the use of the artificial “economic family” standard is what justifies giving lower payments to these folks. So the proposal saves money by … refusing to spend extra money.
Since housing is so expensive right now, many more are living together than we’d normally see otherwise, so I think today’s “economic families” are a bit artificially inflated. If a UBI based on this did go through, I’d expect folks to start moving out of their parents homes to qualify for additional basic income - which would legitimately help them afford their new places, but also cause the programme’s costs to skyrocket.
I don’t think the above was accounted for properly. Don’t get me wrong, I’d love to see a UBI or an NIT come to fruition, and Canada does have a working example of this from the past: https://en.wikipedia.org/wiki/Mincome
But having a badly designed proposal tried and failed would hurt the movement, so we have to look at these ideas closely. Ultimately, I don’t see that the “economic family” concept makes sense, and without it the cost of the programme doubles. Perhaps it still works, but be prepared to fund it at double the stated level, don’t let that rise catch us by surprise.
Universal: Everyone gets it, no means testing, no bureaucracy and the cost associated with that.
Basic: You are not buying caviar and exotic holidays, just enough to live and pay rent.
Income: Therefore taxed.
E.g. If UBI is 1000 a month it will likely push people into a higher tax bracket therefore their after tax income will not be 1000 more and for the richest they should be taxed more than they revive from the UBI. Basically we need to sort out a proper taxation system before this can be implemented.
Universal: Everyone gets it, no means testing, no bureaucracy and the cost associated with that.
Basic: You are not buying caviar and exotic holidays, just enough to live and pay rent.
Agreed.
Income: Therefore taxed.
Minor quibble - technically a concept of non-taxable income does exist, see https://www.taxtips.ca/glossary/non-taxable-income.htm for some examples. But agreed on the main point (that UBI is and should be taxable).
E.g. If UBI is 1000 a month it will likely push people into a higher tax bracket therefore their after tax income will not be 1000 more
In fact it might all be taxed away for those who are actually rich.
and for the richest they should be taxed more than they … [receive] … from the UBI.
I’d go a couple of steps further. Those rich enough (so not just the richest but perhaps everyone who’s even slightly rich) should have the UBI fully taxed away. Another way to put this is that their taxes after UBI should = taxes before UBI + cash value of UBI
Basically we need to sort out a proper taxation system before this can be implemented.
So if this was just some kind of accounting gimmick then this would be perfect.
The issue from what I understand is that real money - the 1000 in your example - has to be sent into the richest person’s bank account (or equivalent money-receiving receptacle) before getting retrieved by being taxed back. Perhaps we could do something like saying UBI is paid out annually and only given the day before taxes are due to be paid in order to minimize the amount of time this money is floating out there - but the issue is that it still costs real money to pay everyone, even the richest of the rich, this UBI, only to claw it back again in full later. (At most, some higher middle class folks might gradually get less and less than the full amount of the negative income tax/basic income, until we get to zero.)
So it’s not the most efficient way to handle money. By contrast, with a NIT we avoid needing to have that extra cash to move around - we’d only have to give the basic income to those who wouldn’t qualify for this claw back. That frees up funds, real money. The catch is that we’d need some bureaucracy to deal with it - but by making it part of the income tax, the existing taxation bureaucracy can deal with it, hopefully minimizing this aspect of the cost. We’d likely have some costs here anyways as part of the “sorting out a proper taxation system” prereq for a true UBI, and the hope is that a NIT wouldn’t cost more than that.
Perhaps we could do something like saying UBI is paid out annually and only given the day before taxes are due to be paid
AFAIK, taxes are withheld from wages and paid from every paycheck, not once a year.
Self-employed people are required to make quarterly installments, not annual.
The “float” cost is minimal. Indeed, I can eliminate it (and reverse it) merely by claiming the payments came out of the previous tax cycle, rather than the current one. The government constantly owes you 12 months worth of payments, and isnt paying you interest on your money. When you die, your estate receives the remaining 12 payments owed to you.
But the biggest reason to apply it uniformly is, IMO, the social costs. Giving it to everyone, it is an entitlement. It is the dividend the citizen receives for their ownership share of their country.
Giving it only to the poor, it is a charity intended to help people who are unable to support themselves.
But how many “rich” people are in Canada? Hundreds of thousands? Millions? It might be minimal for any individual rich person, but it can add up to a significant cost to Canada (or the relevant provincial government). That’s why we need it to get to zero.
Self-employed people are required to make quarterly installments, not annual.
So we can minimize this while still paying these their NIT quarterly.
The government constantly owes you 12 months worth of payments, and isnt paying you interest on your money.
But being paid these 12 monthly payments on a monthly basis has the potential to maximize the float issue.
AFAIK, taxes are withheld from wages and paid from every paycheck, not once a year.
This may not be accurate though. I’m thinking of BaristaFIRE types here - the part time coffee store worker earns such a low income from it, that they’d obviously qualify for the non-U BI or the NIT. But take into account their earnings from interest on their massive investment holdings, and that paints quite a different picture. Hence no BI or NIT until taxes are done. Which brings us to…
Indeed, I can eliminate it (and reverse it) merely by claiming the payments came out of the previous tax cycle, rather than the current one.
That is … brilliant!!! Yes, this solves the problem quite nicely. Basically the rich are required to pay as part of their tax their own BI in advance, before the govt doles it back out to them. Only thing I’d add is to make sure that, for those who make above a certain income (the “rich”), any tax owing must be paid in full before the UBI is paid out. This prevents the float issue from coming back for those who pay late.
When you die, your estate receives the remaining 12 payments owed to you.
And if you have no heirs, it goes back to the gov’t - where it can be redistributed to others. Again, brilliant!
But the biggest reason to apply it uniformly is, IMO, the social costs. Giving it to everyone, it is an entitlement. It is the dividend the citizen receives for their ownership share of their country.
Giving it only to the poor, it is a charity intended to help people who are unable to support themselves.
Agreed for the most part. I was writing earlier that a NIT should cover some middle class folks too. The idea is that we can be more efficient by excluding the rich from this scheme, but if everybody except the rich qualify, it’s still an entitlement rather than a charity, since only the rich lack the entitlement.
That said, if UBI is workable as per your idea above, then it’s academic, since giving it to the rich actually doesn’t cost anything anymore. I’m fine either way - the important part is to get it out there.
Giving it only to the poor, it is a charity intended to help people who are unable to support themselves.
It’s also close to what we have now. If we start picking and choosing it just comes back to the current system. Wealth needs redistribution of massive orders to have an equitable society. Isn’t it wild that MSFT is one of the richest companies because they ripped off Xerox in the 80s? They’re not Canadian, but bad actors are rewarded far too frequently under our current system.
So let’s also remove all tax deductions too, maybe carve out a system we find neccessary for society but take the tax off applied at purchase. If we feel they are needed so the product is cheaper from the consumer (ie. pharmacy drugs, textbooks, tuition, etc.), maybe even put the burden on the seller to collect the taxes at the end of the tax period. If they sell 100 textbooks at $200, and we give them to the students at like $180, then maybe the seller can recoup the difference quarterly during their tax time. This would make doing taxes easier for consumer, easier to audit for CRA as instead of potentially everyone having textbooks and having to validate you just need to make sure textbook sellers are claiming the textbook rebates.
To go even further (which I think could be necessary with rich people getting play money under UBI, or they’d squirrel it away), be done with church tax-exempt status, non-profits, donations, investment losses as reducing tax burden, otherwise it’s very easy to screw the system. If you feel strongly for a non-profit, then donate! I wouldn’t discourage that. But the tingly feeling you get in your heart should be it’s own reward, we shouldn’t have had a financial incentive. It makes the whole thing perverse IMO.
Perhaps we could do something like saying UBI is paid out annually and only given the day before taxes are due to be paid in order to minimize the amount of time this money is floating out there
The usual “source income deductions” (from paychecks) works fine with UBI.
So, if my daughter lives in my house, we’re all related, and thus one economic family.
But, if my daughter moves into my neighbor’s house, and their son moves into my house, we’re now four economic families?
How about once a month, we just direct deposit the same amount into the bank account of each and every person over the age of 18?
FTFY. Kids still cost a lot to raise
I had previously moved more towards a negative income tax approach rather than a universal basic income. The latter seems to be consistently found to be too expensive to implement universally, and how does it make sense to give the basic income to someone who’s currently a billionaire or even a millionaire? (Ok, if a former millionaire loses it all and ends up deep in debt, that’s a bit different, but that’s why I’m limiting to current millionaires.)
That’s why I found this,
To be so intriguing. Alas,
Basically, the use of the artificial “economic family” standard is what justifies giving lower payments to these folks. So the proposal saves money by … refusing to spend extra money.
Since housing is so expensive right now, many more are living together than we’d normally see otherwise, so I think today’s “economic families” are a bit artificially inflated. If a UBI based on this did go through, I’d expect folks to start moving out of their parents homes to qualify for additional basic income - which would legitimately help them afford their new places, but also cause the programme’s costs to skyrocket.
I don’t think the above was accounted for properly. Don’t get me wrong, I’d love to see a UBI or an NIT come to fruition, and Canada does have a working example of this from the past: https://en.wikipedia.org/wiki/Mincome
But having a badly designed proposal tried and failed would hurt the movement, so we have to look at these ideas closely. Ultimately, I don’t see that the “economic family” concept makes sense, and without it the cost of the programme doubles. Perhaps it still works, but be prepared to fund it at double the stated level, don’t let that rise catch us by surprise.
Universal: Everyone gets it, no means testing, no bureaucracy and the cost associated with that.
Basic: You are not buying caviar and exotic holidays, just enough to live and pay rent.
Income: Therefore taxed.
E.g. If UBI is 1000 a month it will likely push people into a higher tax bracket therefore their after tax income will not be 1000 more and for the richest they should be taxed more than they revive from the UBI. Basically we need to sort out a proper taxation system before this can be implemented.
In fact it might all be taxed away for those who are actually rich.
I’d go a couple of steps further. Those rich enough (so not just the richest but perhaps everyone who’s even slightly rich) should have the UBI fully taxed away. Another way to put this is that their taxes after UBI should = taxes before UBI + cash value of UBI
So if this was just some kind of accounting gimmick then this would be perfect.
The issue from what I understand is that real money - the 1000 in your example - has to be sent into the richest person’s bank account (or equivalent money-receiving receptacle) before getting retrieved by being taxed back. Perhaps we could do something like saying UBI is paid out annually and only given the day before taxes are due to be paid in order to minimize the amount of time this money is floating out there - but the issue is that it still costs real money to pay everyone, even the richest of the rich, this UBI, only to claw it back again in full later. (At most, some higher middle class folks might gradually get less and less than the full amount of the negative income tax/basic income, until we get to zero.)
So it’s not the most efficient way to handle money. By contrast, with a NIT we avoid needing to have that extra cash to move around - we’d only have to give the basic income to those who wouldn’t qualify for this claw back. That frees up funds, real money. The catch is that we’d need some bureaucracy to deal with it - but by making it part of the income tax, the existing taxation bureaucracy can deal with it, hopefully minimizing this aspect of the cost. We’d likely have some costs here anyways as part of the “sorting out a proper taxation system” prereq for a true UBI, and the hope is that a NIT wouldn’t cost more than that.
AFAIK, taxes are withheld from wages and paid from every paycheck, not once a year.
Self-employed people are required to make quarterly installments, not annual.
The “float” cost is minimal. Indeed, I can eliminate it (and reverse it) merely by claiming the payments came out of the previous tax cycle, rather than the current one. The government constantly owes you 12 months worth of payments, and isnt paying you interest on your money. When you die, your estate receives the remaining 12 payments owed to you.
But the biggest reason to apply it uniformly is, IMO, the social costs. Giving it to everyone, it is an entitlement. It is the dividend the citizen receives for their ownership share of their country.
Giving it only to the poor, it is a charity intended to help people who are unable to support themselves.
But how many “rich” people are in Canada? Hundreds of thousands? Millions? It might be minimal for any individual rich person, but it can add up to a significant cost to Canada (or the relevant provincial government). That’s why we need it to get to zero.
So we can minimize this while still paying these their NIT quarterly.
But being paid these 12 monthly payments on a monthly basis has the potential to maximize the float issue.
This may not be accurate though. I’m thinking of BaristaFIRE types here - the part time coffee store worker earns such a low income from it, that they’d obviously qualify for the non-U BI or the NIT. But take into account their earnings from interest on their massive investment holdings, and that paints quite a different picture. Hence no BI or NIT until taxes are done. Which brings us to…
That is … brilliant!!! Yes, this solves the problem quite nicely. Basically the rich are required to pay as part of their tax their own BI in advance, before the govt doles it back out to them. Only thing I’d add is to make sure that, for those who make above a certain income (the “rich”), any tax owing must be paid in full before the UBI is paid out. This prevents the float issue from coming back for those who pay late.
And if you have no heirs, it goes back to the gov’t - where it can be redistributed to others. Again, brilliant!
Agreed for the most part. I was writing earlier that a NIT should cover some middle class folks too. The idea is that we can be more efficient by excluding the rich from this scheme, but if everybody except the rich qualify, it’s still an entitlement rather than a charity, since only the rich lack the entitlement.
Think of SALT in the US - https://archive.nytimes.com/economix.blogs.nytimes.com/2013/08/13/the-deduction-for-state-and-local-taxes/ - my recollection is that President Obama tried to push for a reduction of SALT but had to back away due to the outcry. SALT benefitted mostly folks living in blue states, which is why it was only capped in Drumpf’s first term.
That said, if UBI is workable as per your idea above, then it’s academic, since giving it to the rich actually doesn’t cost anything anymore. I’m fine either way - the important part is to get it out there.
It’s also close to what we have now. If we start picking and choosing it just comes back to the current system. Wealth needs redistribution of massive orders to have an equitable society. Isn’t it wild that MSFT is one of the richest companies because they ripped off Xerox in the 80s? They’re not Canadian, but bad actors are rewarded far too frequently under our current system.
So let’s also remove all tax deductions too, maybe carve out a system we find neccessary for society but take the tax off applied at purchase. If we feel they are needed so the product is cheaper from the consumer (ie. pharmacy drugs, textbooks, tuition, etc.), maybe even put the burden on the seller to collect the taxes at the end of the tax period. If they sell 100 textbooks at $200, and we give them to the students at like $180, then maybe the seller can recoup the difference quarterly during their tax time. This would make doing taxes easier for consumer, easier to audit for CRA as instead of potentially everyone having textbooks and having to validate you just need to make sure textbook sellers are claiming the textbook rebates.
To go even further (which I think could be necessary with rich people getting play money under UBI, or they’d squirrel it away), be done with church tax-exempt status, non-profits, donations, investment losses as reducing tax burden, otherwise it’s very easy to screw the system. If you feel strongly for a non-profit, then donate! I wouldn’t discourage that. But the tingly feeling you get in your heart should be it’s own reward, we shouldn’t have had a financial incentive. It makes the whole thing perverse IMO.
The usual “source income deductions” (from paychecks) works fine with UBI.
I guess by that you were trying to explain the same idea as https://programming.dev/post/30075435/16842138 above. If that’s right then I agree - that resolves the float issue.