The Myth that the poor will starve if they pay taxes

Yes, thank you. And why do the people need to be giving out even more in welfare through tax refunds?

 

It is a form of welfare. I don't know how effective it is relative to others.

That said, negative taxation does have some problems with reducing the labour supply.

To claim this is a left-wing position is to show how far removed the U.S. is from normal politics. Negative taxation is a neoliberal (read neoconservative if you must) idea supported mainly by the likes of Milton Friedman (hardly a bastion of the left). The fact that the 'left' in America are supporting this while the Right want it abolished shows how far removed the U.S. is from the centre. A left-wing position (or perhaps even centre) would just involve straight-up welfare payments or perhaps a combination of both welfare payments and negative taxation.

 

Here's what I don't get. The poor spend 100% of their income and that money goes back to the economy, making the poor the most efficient spenders for the economy. The lower Middle class spend 95% of their income, making them very efficient but not as efficient as the poor. Upper Middle Class spends about 80% of their income. They are still rather efficient, but not as efficient as the lower classes. The upper class spends about 60% of their income, making them the most ineficient group of spenders. The Ultra Rich spend about 20%, These are the top 400 individuals.

Why would you want to take spending money out of the system? Spending money fuels the economy. Taxes serve a useful prupose in putting ineficient money supplies to work. That is one of the main points of having a marginal tax rate in the first place. So again, why would you want to tax the most efficient spenders more?

 

I think your talking about a reverse income tax? Robert Reich has suggested doing something simular, but unlike Friedmans reverse tax approach, Reich suggest having a marginal reverse rate. The EITC is a form of reverse income tax that is allready in effect. I actually like his idea because it solves a problem of the current system that should make the right happy.

We all know that the US wellfare system is horribly inneficient as doesn't encourage people to get off of wellfare. The current system actually punishes people for finding jobs. The right wing posters here don't seem to understand the fact that the way the law is currently written actually does punish people for finding work. They attribute the wellfare cycle to people being lazy, where it is actually more of a problem of punishing people who try to succeed. A reverse income tax that Reich suggest would make it so that if you get a job, even a minimum wage job, you will make more money than if you didn't work at all. This greatly helps the problem of people become "stuck" on wellfare.