"An interesting idea - Citizens Dividend"

This substantial piece exploring ideas around a universal income ("Citizens Dividend") has been sitting in my re-read list for about 3 months.

It repeatedly stresses the importance of examining social welfare payments together with tax as two sides of the same coin. There is a certain amount of mathematical analysis, although I find issue with one of the early assumptions.

Above 70,000 per year the tax rate becomes 33%. If this applied to the earnings below $70,000 they would pay $23,100 tax on a 70,000 income instead of $14,020. Which is $9080 greater than they currently pay.
In other words at present Rankine points out that that we effectively tax those at or over $70,000 at 33 cents on every dollar of their income but we give back to them $9080. Why do we not do the same for everyone? That is, tax at 33cents on every dollar earned but give back $9080 per annum. If everyone did earn over $70,000 that would be exactly what we would be doing. So why do we not give the same benefit to all those who earn less than $70,000? Clearly those earning less than $70,000 per year would be better off than at present so it would cost the Government more than at present.

A moments contemplation shows that by the same logic we are taxing everyone at 33 cents on the dollar and merely giving back a lesser amount to those who earn under $70,000.

Later on I disagree (enough to want to mention it) with some of the suggested benefits of an asset tax (examined in the article as a means of making up a shortfall between income tax and the CD).

Some of the virtues of such a tax are:
-It is paid by those who can afford to pay – even if they have to borrow in some way against their assets.
-It will catch overseas owners who have no income in NZ.
-It will encourage the use of capital in productive enterprises rather than ostentatious expenditure on boats, houses, cars and the like.
-the tax base will be greatly broadened.
-more productive use of existing resources will be encouraged – e.g. working shifts in a factory rather than incurring additional expense to increase plant and buildings.
-An asset tax is in line with the overall objective to reduce the disparity in wealth.

- It is paid by those who can afford to pay – even if they have to borrow in some way against their assets.
Or the cash-poor are going to get trapped in a tax-debt situation, the interest effectively increasing their marginal tax rate at no gain to society. Is this their punishment for not being savvy enough to make profitable use of their asset, or not being willing to cash up the family home, or suffering some misfortune which consumes their reserves?

- It will encourage the use of capital in productive enterprises rather than ostentatious expenditure on boats, houses, cars and the like.
I think certain of the author's prejudices are showing. I also not that under the asset tax he[?] suggests there is a social benefit to people purchasing ostentatious assets - as this will result in ongoing tax revenue.

- more productive use of existing resources will be encouraged – e.g. working shifts in a factory rather than incurring additional expense to increase plant and buildings.
The suggestion that people should "just work more" always gets my heckles up. As does treating people as nothing more than labour-units. There are probably people out there who enjoy shift-work - but I don't think I know any who would claim they couldn't make better use of their time wouldn't prefer a more reliable schedule.

One of the comments raises my ire for a similar reason

Cameron W Browne
The only catch that comes to mind is the disincentive to work harder and earn more – if your lifestyle is paid for at $x, why would you want to be more productive?

Why indeed. Hai - I earn enough to pay for my comfortable lifestyle and actually don't really feel the need to be more productive just for the sake of money. But I do put time and energy into other things which could be considered to have a social benefit. Is that not productive enough for you?

The bigger issue - why do so many people seem to feel that "being productive", "working harder" and "earning more" are the highest things to which a person or society can aspire?

[end rant]

Excuse me, I think I need to eat something.

Day of rest

Not really. Stayed in bed past 10 because the chesty tail-end of this head-cold is still not letting me sleep properly. Filled the green bin with a fern hair(frond?)cut and sundry other garden debris. Wrote an overdue blog post. Mowed the lawns. Whittled my RSS backlog down to size. Re-read my Tiny Discworld edition of Mort. Killed some time trying to find a computer game to play. Purged some old files / folders from my archive that I am seriously never going to need again and in some cases which had quite negative emotions attached.

It has actually felt like the first day of a holiday, perhaps suggesting how badly I need one. Alas it is not so and tomorrow I work again, with the goal of at least 6 hours a day for the next 3 days to enable the nearest I can hope for before Christmas - a day of appointments and other stuff on Thursday, a deliberately work-light day on Friday to catch up on a few other things, 48-hour-party weekend and recovery on Monday. This doesn't actually seem like much of a holiday to me. I may not be working and they may be self-imposed but there are still obligations and to a fairly full schedule.

I am going to try for an early night - through boredom and in hope of both sleep and being up at a reasonable time in the morning.