[ExI] Friedman and negative income tax

Dan dan_ust at yahoo.com
Tue May 5 13:53:50 UTC 2009

--- On Mon, 5/4/09, Stathis Papaioannou <stathisp at gmail.com> wrote:
> 2009/5/5 Dan <dan_ust at yahoo.com>:
> > Doesn't that fall under a "value disincentive"
> explanation?  Yes, some might take the payments, but
> there's a strong disincentive for it under at least some
> conditions.  Once their condition changes, they no longer
> take it -- whether that includes merely the availability of
> jobs to feel good about or because the income is higher.
>  (Of course, on the latter, one might expect marginal
> effects -- as when someone might be disinclined to work
> merely to make a small improvement in income.  In this
> case, what's small depends on the person.  Were this, too,
> not the case with most people, I'd expect we'd see lots more
> people working ever longer hours to make ever more money.
>  In fact, even people not on the dole often make a certain
> level of income and then prefer leisure or non-work to more
> money.  I've found myself in this position often too.)
> Yes, and that's fine. It would only be a problem if there
> were a
> disincentive for anyone to work, although then wages would
> probably
> rise to compensate.

Might or might not.  There's no a priori reason to expect that to happen -- and there seems a large amount of data on people who will stayed unemployed for a lifetime provided they have enough financial support to do so.  And I don't mean people who get grants and write operas or have a go at deciphering the Indus Valley symbols.  (I've lived in neighborhoods full of able-bodied pre-retired people who just collected check.)

Of course, you were talking about people with a specific problem who get support as part of the package to help with that, correct?  That might be far from the general case.  (It's also true that in a free society, such people could be taken care of through private charity rather than coerced support.)




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