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Bill: Negative Income Tax
Details
Submitted by[?]: Leviathan Party
Status[?]: passed
Votes: This is an ordinary bill. It requires more yes votes than no votes. This bill will not pass any sooner than the deadline.
Voting deadline: December 2332
Description[?]:
| Though we do not have the authority to propose changes to the tax code, we submit this as a theoretical framework and will leave it to parties with said authority to take up our proposal and see what numbers will work. The NIT works as follows: the nation dismantles all forms of welfare and most social services, and instead takes the money spent on those services and the bureaucracy and divides it equally among all citizens, sending each of them a check for the alotted amount. The people are then free to use that money as they please, to purchase the services of their choosing from the vendor of their choosing. This then complemented by a flat tax of ~25-30% on all income above the amount of the check being sent out ONLY IF the individual in question completes 50 hours of community service with recognized charities and service providers a year. Thus, someone who is unemployed and is living off their NIT check (thus reporting their income as x amount) will have to complete around an hour of community service a week in order to avoid paying taxes on their income. Equally, someone who is employed need only complete those same 50 hours to see a large chunk of their income tax exempt. We propose keeping education and healthcare state run, since these are two services that become more efficient the larger the economy of scale. Large hospitals and school systems are able to avail themselves of more expensive facilities and equipment than their smaller counter parts, spreading out the user fee on that equipment over a larger base, and giving that same large base access to equipment small facilities cannot afford. All other social services will be eliminated. On the budget, we propose removing a large segment of the funding to health and social services, thus running a surplus, which will then be sent out in the form of the NIT check. |
Proposals
Article 1
Proposal[?] to change Guarantee of minimum income.
Old value:: All adults not supported by another person shall be guaranteed a reasonable, though not high, standard of living by the government.
Current: All adults not supported by another person shall be guaranteed a very basic subsistence income by the government. However, the provision of this is not to exceed a certian period of time.
Proposed: All adults not supported by another person shall be guaranteed a very basic subsistence income by the government.
Debate
These messages have been posted to debate on this bill:
| Date | 17:49:48, December 16, 2006 CET | From | Malivia Democratic Party | To | Debating the Negative Income Tax |
| Message | We would prefer this option: "All adults not supported by another person shall be guaranteed a very basic subsistence income by the government. However, the provision of this is not to exceed a certian period of time." |
| Date | 20:52:59, December 16, 2006 CET | From |  Protectorate Party | To | Debating the Negative Income Tax |
| Message | The proposal the MDP suggests cannot work in the framework the LevP is proposing. The LevP is suggesting that we tax all income at about 25%. We then take this money, pay for needed services of the government and then evenly divide the remainder and return it to the people as tax free money. IF the MDP dislikes this plan, please address it directly. The comment left does not further the debate for the issue at hand. That said, while the LevP's suggestion is a bold plan at income redistribution, we most consider its effect on our economy and more directly our budget. Our concerns are on how this type of floor will effect prices for housing and other basic necessities. In addition how effective this redistribution would be, and how our governmental departments will be effected. We will turn this matter over to our financial adviser Finn E. Pincher for review. |
| Date | 21:11:09, December 16, 2006 CET | From | Malivia Democratic Party | To | Debating the Negative Income Tax |
| Message | Okay, The MDP completely opposes hiking taxes to a flat rate of 25%. Despite the concept of a 'government check', it seems quite redundant to tax people at a high rate, then give money back, when it would be simpler to just have a lower, progressive tax. While the MDP is not opposed to small forms of income redistribution, through social tax credits, and various deductions, what the LevP is proposing is an excessive form of income distribution, punishing success, and will in fact harm the economy by removing wealth from the people, and putting it in the hands of the government for them to decide who deserves what. So, the MDP opposes this. |
| Date | 23:57:48, December 16, 2006 CET | From | Protectorate Party | To | Debating the Negative Income Tax |
| Message | While much of the MDP comment addresses the same issues we have with the suggested plan, we do not feel that the last part is accurate. This plan actually removes the government from deciding who deserves what, which is what targetted deductions do. Each individual receives an equal share of the refund, enabling the individual to decide how they will spend it. Our questions to the LEvP: is this refund to each citizen, each family, or each adult? What are perceived to be essential services? defense, trade, etc. |
| Date | 01:23:15, December 17, 2006 CET | From | Leviathan Party | To | Debating the Negative Income Tax |
| Message | "Our concerns are on how this type of floor will effect prices for housing and other basic necessities. In addition how effective this redistribution would be, and how our governmental departments will be effected." Regarding prices, we don't foresee a significant change. Currently, the state provides income to the unemployed sufficient to pay for thsoe goods. Under this proposal, the state will also provide income to the unemployed sufficient to pay for those goods, with the provision that they provide some community service. The primary difference between an NIT and a welfare state is the bureauracracy. Under a welfare state, billions of pliny are spent to pay the salaries of the workers who maintain the support system for distributing services. Not for the services, just those who answer phones, push pencils, keep accounts tabulated and so on. The idea of the NIT is that it's cheaper for the government to just cut a check to recipients of aid than to give those people the aid AND pay the salaries of the bureaucracy. There will be a slightly bump as workers in the HSS system are let go, but if we roll in planning boards at the same time those individuals will find their skills are equally needed in those new institutions. The intended end game of an NIT is to provide the same level of access to social services under a welfare state, but for less expense to the state (and thus the tax payers) and while giving people the ability to choose which services they want. The creation of tax exempt income in exchange or community service also creates a powerful imperative for citizens to get involved in their community. Let's not underestimate the effect of fifty million citizens doing one hour of community service work a week. We predict that, with that change to our tax code, we will find a huge increase in charitable works and community stakeholding. "is this refund to each citizen, each family, or each adult?" The refund is based on citizens in a household, just like the poverty line is. Just as currently we provide funds for children and dependents, the NIT will include the value of those services in its calculation. Citizens receiving welfare should see no disruption in their services, merely in how they get their check each month. "What are perceived to be essential services? defense, trade, etc." This proposal will only affect 'welfare' services, primarily those of the health and social services ministry. Any citizen support programs under other ministries, for instance food programs under the Ministry of Food and Agriculture, would be similary affected, moving those monies away from paying for ministerial services and towards funding the NIT checks. Non-welfare services, such as defense, trade, infrastructure investment etc, will not be cut in any way. "The MDP completely opposes hiking taxes to a flat rate of 25%. Despite the concept of a 'government check', it seems quite redundant to tax people at a high rate, then give money back, when it would be simpler to just have a lower, progressive tax." The purpose of combining the NIT with a flat tax is to eliminate complaints about whose taxes are to high, since now everyone's taxes are the same. In addition, real taxes for most citizens will go do PROVIDED they complete community service. In fact, citizens who have jobs that make LESS than the NIT check will receive both the check and tax exempt status on their income, provided they complete community service. This will actually raise their net income. "While the MDP is not opposed to small forms of income redistribution, through social tax credits, and various deductions, what the LevP is proposing is an excessive form of income distribution, punishing success, and will in fact harm the economy by removing wealth from the people, and putting it in the hands of the government for them to decide who deserves what." This is typical free market radical dogma. Only in the world of the ultra-capitalist is a government program to guarantee food for people excessive. In Malivia, we take seriously our obligation to our fellow brothers and sisters, and that means we guarantee all citizens food, clothing, housing, healthcare and education. These are not values we can negotiate away, they are the foundation of our society and civilization, and we invite barbarism if we decide to default on those obligations. We also note that in opposing this measure, the MDP is opposing lessening the size and scope of government. The NIT returns choice to the people while still ensuring we have guaranteed them food, clothing, housing, healthcare and education, and does so with a smaller price tag than our current system. To say the NIT will put the tax payers' money in the hands of the government for the government to decide who gets what is ridiculous, and clearly is not the case. The NIT puts the money directly into the hands of the people, and everyone gets the same amount. Exaclty how does that mean the government is making decisions for people? And the argument that this punishes success is not just irresponsibly unsustantiated, it's simply wrong. We are proposing a tax system that taxes all people equally, that will lower taxes on the higher income bracker, lower real taxes for many of our citizens, and is far less than previous proposals we have seen. Furthermore, this does not remove wealth from anyone. Wealth is not the same as income; wealth are assets that grow in value, rather than diminish, such as a house or land. Given that the NIT will be funded by income tax, not property or capital gains tax, no wealth is affected. And given what citizens get back in return for their income taxes, it is more than a fair trade. The NIT is win-win: it provides the services we are obliged to guarantee our citizens, while decreasing the size and expense of government. |
| Date | 02:13:28, December 17, 2006 CET | From | Malivia Democratic Party | To | Debating the Negative Income Tax |
| Message | The NIT is not a win win, here is why: LevP: The purpose of combining the NIT with a flat tax is to eliminate complaints about whose taxes are to high, since now everyone's taxes are the same MDP: People have long expected that those who earn more, pay more. What the NIT will do with a flat tax is foster complaints, especially considering that everyone is expected to fork over a quarter of their income. Typically middle and upper income class will complain because they earn more, they should get more of a refund. Lower class will complain because they're being taxed more LevP: In fact, citizens who have jobs that make LESS than the NIT check will receive both the check and tax exempt status on their income, provided they complete community service. This will actually raise their net income. Counterargument: If this is like the (OOC) Earned income credit, then we don't oppose. But the earned income credit does not require taxes to be raised to 25%. In short, you can provide a credit or a rebate check without raising taxes to 25% LevP: This is typical free market radical dogma. MDP: The MDP realizes that the LevP hates free markets but has continually mislabeled free markets as damaging to the peoples needs. The MDP believes that free markets, and services to the people can co-exist peacefully. LevP: In Malivia, we take seriously our obligation to our fellow brothers and sisters, and that means we guarantee all citizens food, clothing, housing, healthcare and education. MDP: In other words, the LevP likes the 'nanny state' idea. The MDP believes we should help others, but to guarantee everything to the people is a bit excessive, especially if said people are capable of providing it to themselves. LevP: we invite barbarism if we decide to default on those obligations. MDP: Thats kind of an exaggeration. If the LevP believes people managing their own lives without the need of a nanny state is 'barbarism', then Malivia has alot of problems. LevP: To say the NIT will put the tax payers' money in the hands of the government for the government to decide who gets what is ridiculous, and clearly is not the case. MDP: It is the case. The LevP wants to force the people to turn over 25% of their income to the government, regardless of income, and then the government is going to turn around and distribute checks according to the LevPs preference. The MDP opposes such absurdity. LevP: he NIT puts the money directly into the hands of the people, and everyone gets the same amount. MDP: Keeping taxes lower keeps the money in the hands of the people, and doesn't cause the redundancy of money going from people back to the people. LevP: And the argument that this punishes success is not just irresponsibly unsustantiated, it's simply wrong. MDP: It does punish success. If I'm earning 100K, and I'm told I must fork over 25% of my tax, and in return I'm going to get a refund thats the same amount as someone earning 20K, I'm going to leave the country. If I'm earning 20K, and I'm told I have to fork over 25% of my income, regardless of a refund I'm going to leave the country. Successful people leaving the country because of an excessive tax system doesn't sound like success to us. LevP: We also note that in opposing this measure, the MDP is opposing lessening the size and scope of government. MDP: We don't necessarily oppose this measure. We oppose the LevPs 25% tax plus NIT idea. Throw that out and we may vote for this. |
| Date | 04:29:31, December 17, 2006 CET | From | Leviathan Party | To | Debating the Negative Income Tax |
| Message | "If I'm earning 20K, and I'm told I have to fork over 25% of my income, regardless of a refund I'm going to leave the country." Absolutely, the first response for the thousands of years of taxation has been for people to leave. If that were the case taxes would have long ceased to exist as everyone crowded into the few anarcho-capitalist safe havens present in the world. Moving on to actual constructive dialogue, the Ministry of Trade and Industry has compiled the following statistics: Itaki Unemployment Rate: 8.26% (2.3M) Walkunia Unemployment Rate: 3.87 (.9M) Polkana Unemployement Rate: 8.69% (1.7M) Dendars Unemployment Rate: 3.51% (.65M) Washibar Unemployment Rate 4.75% (.66M) Malivia Unemployment Rate: 6.18% (6.21M) If we were to set the NIT at 1000 Mpy, that would require 6.21B Mpy a year for their checks. This seems high, but it is worth nothing that Malivia's citizens pay a quarter of the taxes in other comprable nations. https://www.cia.gov/cia/publications/factbook/geos/my.html Given that the PP is proposing increasing the HSS budget to 6B, the NIT is very affordable. Per capita income in Malivia is 2687 Mpy, so we should also be radically rethinking where we set our tax levels. Our PCI is just above the global average (2650), so this should not be taken as a sign of the weakness of our economy, simply that our current tax code does not accurately reflect the Malivian cost of living. We request the PP draw up a new tax proposal breaking income below 5000 Mpy into 500 Mpy so that we can have more accurate data on potentially low income Malivian workers. |
| Date | 15:06:23, December 18, 2006 CET | From | Malivia Democratic Party | To | Debating the Negative Income Tax |
| Message | LevP: Absolutely, the first response for the thousands of years of taxation has been for people to leave. If that were the case taxes would have long ceased to exist as everyone crowded into the few anarcho-capitalist safe havens present in the world MDP: If not the people, their money. (OOC: I'm sure people have heard of swiss bank accounts, or cayman island accounts.). |
| Date | 13:32:50, December 19, 2006 CET | From | Leviathan Party | To | Debating the Negative Income Tax |
| Message | The MDP is basically making this up as they go along. We would love or them to take the time, as our staff has, to compile some supporting evidence for the baseless fantasies they weave on the floor of the Jawatankuasa. Firstly, we're not convinced such a 'tax flight' would be of a significant amount of income. Second, if it is, our response should be to step up enforcement of tax evasion, not to act as if when someone circumvents the law our only choice is to legalize that action. If the MDP could bring themselves to go over the packet we compiled, they'll see that our taxes are extremely low, and other nations have survived quite nicely under taxes /four times/ our own. Given that our budget is, comparatively, minute, we can absolutely afford to raise taxes without it becoming a burden to our people. |
| Date | 00:34:25, December 21, 2006 CET | From | Leviathan Party | To | Debating the Negative Income Tax |
| Message | We are moving this to a vote, and should it pass we will propose a new budget and tax system to start the transition to the institution of an NIT. |
| Date | 02:35:48, December 21, 2006 CET | From | Protectorate Party | To | Debating the Negative Income Tax |
| Message | We support the idea in theory, we question the need for a flat tax rate though. Could not the system work the same with a progressive rate? |
| Date | 12:16:19, December 21, 2006 CET | From | Leviathan Party | To | Debating the Negative Income Tax |
| Message | We are willing to compromise on the issue of the flat tax, but we would prefer a generally flat tax than a steeply progressive one. Given that most of Malivian workers make less than 5,000 Mpy, there won't be much de facto difference. We will consider these options when we open discussion on the new tax system. |
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Voting
| Vote | Seats | ||||
| yes |
Total Seats: 150 | ||||
| no | Total Seats: 0 | ||||
| abstain | Total Seats: 50 |
| Random fact: The people in your nation don't like inactive parties. When you often abstain from voting for a bill, they will dislike your party and your visibility to the electorate will decrease significantly. Low visibility will means you are likely to lose seats. So keep in mind: voting Yes or No is always better than Abstaining. |
| Random quote: "If men want to oppose war, it is statism that they must oppose." - Ayn Rand |